CCP Policies Create ‘Artificial’ Energy Crisis as Chinese Citizens Lack Winter Heating

A man stands outside during heavy snowfall in Harbin, Heilongjiang Province, China, on Nov. 18, 2013. STR/AFP/Getty Images

China is going through an energy crisis as residents in several regions struggle to secure enough natural gas for heating during the winter season as government restrictions and a lack of funds curtail supplies.

The shortage of natural gas is concentrated in rural and low-tier cities in northern China, where residents have been left in freezing conditions without access to gas to heat their homes, the South China Morning Post reported.

Local governments reportedly haven’t received funds from the national government. Gas is thereby being rationed, with homes only receiving the bare minimum necessary for cooking purposes and little for heating. Local authorities haven’t placed sufficient orders with suppliers to fulfill demand.

“What’s currently happening is not really a supply shortage in the strict sense of the word. Rather, it is an artificial shortage,” Alfredo Montufar-Helu, head of the China Centre for Economics and Business at The Conference Board, told the Post.

Montufar-Helu explained that the difference between retail and wholesale prices and the “inability” of some local governments to provide subsidies that make up for the difference are the two main factors that have created a gas shortage situation in some parts of China.

The Subsidy Factor

In an interview with The New York Times, Yan Qin, a China energy specialist at London-based data company Refinitiv, said China actually has the necessary gas supplies to get them through winter.

However, the problem is that the government’s pricing regulation, as well as cutting down on subsidies, means that gas isn’t reaching northern regions that are currently seeing low temperatures.

The wholesale cost of gas is now said to be three times what distributors are allowed to charge households. As distributors can pass the full cost to business users, they have an incentive to focus on selling to this demographic and minimize sales to homes when gas prices are elevated.

Coupled with the financial strain, many local governments reportedly aren’t in a position to subsidize gas to citizens.

“If they would be able to subsidize, we would not have this shortage,” Qin said.

In Hebei province, residents have filed several complaints with local authorities regarding the limits placed on gas purchases, the Post reported.

US Energy Issue

In a Jan. 27 analysis of the situation, the Institute for Energy Research (IER) blamed Chinese government policies for causing “discomfort” to its citizens this winter.

Since Beijing forced an energy transition from coal to gas, “residents have little option but to freeze from the cold weather,” especially since the government isn’t willing to subsidize the cost, the IER stated. The research institute also drew a comparison to the energy situation in the United States, pointing out that U.S. President Joe Biden is making similar mistakes.

“President Biden wants to electrify the U.S. economy while taking away natural gas for heating and cooking, and taking away gasoline and diesel for fueling automobiles and trucks. Further, he wants all the electricity to be produced by non-carbon sources, mostly wind and solar power,” IER stated.

“The lack of diversity of supply would put the U.S. energy system in a devastating position far exceeding the above situation in China. Eliminating options is harmful to national security, to livelihoods, and to the American economy.”

After becoming president in January 2021, Biden issued an executive order that froze oil and gas leases. He also stopped the Keystone XL pipeline that was set to supply 830,000 barrels of oil per day to the United States from Canada.