China's Energy Crunch About To Hit Home?

This is a pretty ominous report from China claiming that they've basically got two weeks of coal reserves before they start shutting down power plants.

CHINA only has enough coal for 12 days of consumption, three days less than a month ago, state media reported Wednesday, sounding the alarm bells over the nation's most important source of energy.

In certain parts of China, such as densely populated Hebei province in the north, reserves are down to less than a week, Xinhua news agency reported, citing the China Electricity Regulatory Commission.

In the period since early March, coal reserves have slumped by 12 per cent to 46.7 million tonnes, according to the commission.

Reasons for the shortage were "multi-dimensional," the commission was quoted as saying, without elaborating.

That's a pretty serious problem for a country that is hugely dependent on coal to produce the goods that most of the world uses and which the government in Beijing uses to keep a lid on discontent. It follows a winter in which vast parts of the country were shut down because of snowstorms and coal supplies dwindled because trains couldn't bring in new supplies.

If the economy falters because of power disruptions, it's going to create serious problems not only in China but around the world, though it might mean cleaner air for billions of people as thousands of factories are forced to shut down or severely curtail production over the lack of reliable power.

How did this problem get so bad? Government mismanagement almost certainly plays a role, but so does rampant development across the country. It's this rampant development that has also driven up petroleum costs around the world with no sign of abatement any time soon.