The soaring oil price has become a driving force behind the development of alternative energies, said leading people from energy circles at the Boao Forum for Asia annual conference 2006 on Saturday.

The closing price of crude oil on the New York Mercantile Exchange (NYME) skyrocketed to over 75 US dollars per barrel on Friday, another new record since the founding of the NYME.

Zhang Guobao, vice minister in charge of the National Development and Reform Commission (NDRC), said at the forum held in south China's island province of Hainan that a high oil price brings about not only challenges but also opportunities.

It will not only promote the investment in world oil exploration and production, but also that in alternative energies and energy saving, he said.

Supporting Zhang's opinion, Utz-Hellmuth Felcht, chairman and CEO of Degussa AG, said that major international chemical companies including his own are searching for alternatives to relieve the pressure caused by soaring oil price.

The Energy Policy Act of the United States issued in 2005 aims to increase the annual consumption of fuel alcohol or bio-fuel to 7.5 billion gallons by 2012.

Jiro Nemoto, Honorary Chairman of NYK Line, said that as the world's top oil importer, Japan has developed the highest energy consumption efficiency in the world.

Citing statistics of the International Energy Agency (IEA), Jiro Nemoto said that if the energy consumption of Japan for producing one unit of GDP is denoted as one, then that of the European Union is 1.6, the United States, 2.7, the Republic of Korea, 3.3, with China, 9.

There is still a lot of inefficiency in China's industrial structure and the energy consumption for producing one unit of GDP is quite high when compared with developed countries, said Zhang Guobao.

But looking at it another way, he said, it also leaves ample room for China to improve its energy structure and efficiency.

China has made great efforts in developing alternative energies, said Zhang. According to him, China's experiments of alcohol-mixed gasoline in northeast and central China have made progress and the NDRC is planning to expand it to other regions.

And the project to refine coal into oil by the Shenhua Group Corporation Limited, one of China's largest coal producer, will be completed next year, he said.

Speaking at a meeting on energy development on Thursday, Chinese Premier Wen Jiabao called for effective measures to ensure the implementation of the government's energy saving and renewable development policies.

The meeting also asked major state-owned energy companies to develop renewable energies, said Zhang.

(Xinhua News Agency April 23, 2006)