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Energy Policy 35 (2007) 31453154 www.elsevier.com/locate/enpol

What is the limit of Chinese coal suppliesA STELLA model of Hubbert Peak
Zaipu Tao, Mingyu Li
Northeastern University P.R.C., School of Business and Administration, No. 329, Northeastern University, No. 11, Alley 3, Wenhua Road, Hep. Shenyag, Liaoning 110004, PR China Received 26 July 2006; accepted 6 November 2006 Available online 12 January 2007

Abstract American geophysicist M. King Hubbert in 1956 rst introduced a logistic equation to estimate the peak and lifetime production for oil of USA. In his 1956 article Nuclear Energy and the Fossil Fuels, in which he predicted the production peak for the USA, Hubbert used 80 pages of differential equations to draw his conclusions. That earned him some criticism, because only those with profound mathematical knowledge could understand. Hubbert presented in his 1982 article, Techniques of Prediction as Applied to the Production of Oil and Gas an alternative method that was much more accessible. Since then, a erce debate ensued on the so-called Hubbert Peak, including also its methodology. The production of coal elds generally appears like a bell-shaped curvea gradual increase to maximum output, then a short peak and a gradual decline. Some people thought the capacity of coal supply only depended on the economical cost and technological factors, but did not consider the life cycle of coal elds, namely, that once the output has reached Hubbert Peak, no matter by whatever effort, one cannot increase production. This paper proposes to use the generic STELLA model to simulate Hubbert Peak, particularly for the Chinese raw coal production. This model is demonstrated as being robust. According to this simulation, the coal peak in China comes between 2025 and 2032 with peak production at about 33394452 million tonnes. Before the peak comes, Chinese coal output will grow by about 3%4% annually; after the peak, however, the output will fall. Chinas coal demand at 2050 would be about 2500 Mt of raw coal and possess 42.6% of total primary energy. The gure of coal demand, 2500 Mt, would be beyond possible supply, which is 2338 Mt according to the Hubbert curve of this paper. The gap between coal supply and demand will be 7% of the demand at 2050. Notably, the sustainability of Chinese coal dominated energy policy will be challenged seriously by this so-called Hubbert Peak. In the coming decades China should nd a new energy development policy related to supply diversication. r 2006 Elsevier Ltd. All rights reserved.
Keywords: Hubbert Peak; STELLA model; Cumulative production

1. Background 1.1. Reserves In a ranking of coal reserves in 2000, China is third in the world after the USA and Russia, with 114.5 billion tons of proven recoverable reserves (BP 2002). At the end of 2002, the Chinese Ministry of Land and Natural Resources declared that the Chinese proved recoverable reserves are estimated at 186.6 billion tons, or around 14% of the
Corresponding author. Tel.: +8613998802065.

E-mail address: liglenda@163.com (M. Li). 0301-4215/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2006.11.011

worlds total proved recoverable reserves. On this basis, it is estimated that China could continue the current level of coal production for a further 105 years (MLNR 2002). Total coal resources in place are estimated to be much higher than proven recoverable reserves, at around 1 trillion tons (WEC 1995). In China, the main location of coal reserves centralizes in the north and is far away from the coal markets of the southeastern coast where the major industrialized regions are situated (Fig. 1). Transportation over this geographic distance is costly and time consuming. Thus, many provinces prefer to import coal with lower freight costs rather than transporting coal from far-away domestic provinces.

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Fig. 1. Coal resources in place. Source: Barlow and Jonker (2001).

1.2. Ownership of coal mines Coal mines in China are classied into three types according to the ownership:

  

key state mines (centrally administered by the state administration of coal industry but now under the administration of provincial governments); local state mines (administered by the provincial, prefecture and county governments); township and village enterprise (TVE) mines (run by small collective organisations or individuals in townships and villages). In 2001, there were almost 100 key state coal mines, which made great efforts to adopt advanced coal mining techniques. The numbers of the local state mines are around 2000 (Zhu, 2001), and always partially mechanised with much smaller size than the key state mines. Based on various estimates and including mines operating without authority, the number of township and village enterprise mines ranged from 21,00023,000. These mines mostly use manual coal mining techniques with low efciency, but also low cost, for the production.

1.3. Production Under the policy of so-called Letting the large, medium and small size coal mines develop simultaneously in coal industry before 1996, the coal production and supply increased largely. It was in 1989 that Chinese raw coal

production brought 1 billion tons and had led coal production in the world for ten years. The historical peak of domestic coal production appeared in 1996 with 1.39 billion tons and the yearly increase during the period of the eighth 5-year plan from 1991 to 1995 was about 40 millions. However, for the increasing problem of safety and environment, the state government started to adjust coal production and, from 1997, implement a programme of small mine closure. Thus, many TVEs were closed, which consequently caused coal shortage and price uctuations, and which restricted the economic growth for several years. The coal production decreased to 1.33 billion tons in 1997, 1.25 billion tons in 1998, 1.1 billion tons in 1999 and 988 million tons in 2000. In the medium and long-term energy plan, optimizing the energy structure, improving energy efciency and strengthening environmental protection are the key principles. Under the plan, coal mining technology and equipment will also be improved. Especially in large coal mines, by 2005, the mechanisation level was over 90% compared with only about 74% in 2000, and in coal mines of medium size, the degree of mechanisation was over 60% by 2005. Many of the small coal mines with less efciency will exit the coal market by going bankrupt or being closed and all types of high sulphur coal mines as well as coal mines with a coal recovery rate below 50% will be prohibited. Meanwhile, state enterprises will be made continuously more market-oriented. It is estimated that in the country the combined market share of the eight largest coal producers will be over 35% .

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1.4. Productivity Productivity in Chinese coal mines compares poorly with world levels. In 1999, the coal output per person year in all mines in China was estimated to be 289 tons, far lower than for countries with advanced techniques and equipment. For instance, the same indicator in the same year was 12,100 tons in Australia, 11,900 tons in the United States, and 3900 tons in South Africa. Chinese sources estimated productivity per person to be one-ftieth of that in developed countries (Platts 2002a). 1.5. Export and import A rapid increase in coal exports appeared in recent years, particularly the steaming coal, when important changes within Chinas coal industry took place. Just for the recent rapid improvement of coal exports, China, as a signicant player, emerged in international coal markets. The coal imports in China also increased steadily since 1998, but the proportion of imports in total coal consumption was still small, about 0.2% in 2001 and nearly 1.0% in 2002 (Tex Report 2003a) when the rapid increase in imports could be attributed chiey to the increasing gap between domestic demand and supply, and resulting in higher domestic prices. In some areas, domestic prices were reported to exceed international prices by up to US$67 a ton. 1.6. Uncertainty There is considerable uncertainty about coal policy setting in China. On the domestic demand side, the rate of growth of Chinas economy will be one of the important factors likely to cause strong domestic coal demand, which, however, will be relieved by expected increased efciency in coal use. Meanwhile, the environmental regulations are likely to make the cost of coal use improve generally. On the domestic supply side, coal supply in China became tighter around the policy of closing small and local mines. The incentive for China to meet its high export targets will be reduced by high domestic prices, if coal producers could gain higher returns from domestic markets than international markets. However, if the role of coal in Chinas domestic economy is forecast to continue to decline, Chinas government may greatly emphasize the coal export to maintain the domestic production levels. Thus, the export volumes of coal in the future have much uncertainty (Zhang, 2001). 2. Hubbert Peak To estimate oil production, American geophysicist M. King Hubbert (19031989) used a logistic equation, which was rst developed by the Belgian statistician P.F.Verhulst. (18041849). Hubbert successfully predicted in 1956 that oil production for the lower 48 states of USA would peak between 1965 and 1970. In his 1956 article Nuclear

Energy and the Fossil Fuels (Hubbert, 1956), he used 80 pages of differential equations to draw his conclusions. That earned him some criticism, because only those with profound mathematical knowledge could understand. Hubbert presented in his 1982 article Techniques of Prediction as Applied to the Production of Oil and Gas (Hubbert, 1982) an alternative method that was much more accessible. Ever later, various papers (Campbell, 1991; Deffeyes and Kenneth, 2005; Korpela and Seppo, 2005; Lynch and Michael, 2002) discussed the Hubbert Peak for oil but few were relating to coal particular about Chinas coal peak (Fig. 2). Conceptually, the coal recoverable reserves are not like the stock in a warehouse. When we say 100 pairs of shoes are held in store, it means, where 100 pairs of ready-made shoes are put, you can get one pair every day, or ten pairs, if you like. But when we say that there are 100 tons coal reserves in place, it does not mean that the annual output of coal will be what you would expect. Hubbertists suggested that the annual production curve would be like a bell-shaped curve and that output would be declining irreversibly after the production peak of coal was reached. We will compare the coal reserves to a persons height and the coal production to its annual growth amount. The persons height will be described with an S-shaped curve and the annual growth amount with a bell-shaped curve. Similarly, the cumulative production is like an S-shaped curve and the annual production of coal is something like a bell-shaped curve. The Chinese raw coal production was 32 million tons in 1949 and about 1 billion tons in 2000, i.e., the amount of production of Chinese raw coal increased nearly 300 times in half a century. Fig. 3 shows the historic coal production and cumulative production. In order to determine the Hubberts Peak, one needs two sets of data, the annual production, called P, and the cumulative production, known as Q. With the help of a calc sheet, we can determine for each year the value of P/Q.

12 10 8 6 4 2 kt/person year Australia China Canada Russia South Africa United States 1994 1994

Fig. 2. The international comparison of coal productivity Source: IEA 2001b.

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2500

40000 35000

production milli.tonnes

cumulative prod. 1500

30000 25000 20000

1000

15000 10000 5000

500

0 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004
Fig. 3. The historic coal production and cumulative production (19492004).

written as
0.6 0.5 0.4 P/Q 0.3 0.2 0.1 0 0 10000 20000 Q 30000 40000

P=Q a a=RQ.

cuml.prod milli.tonnes

2000

production mill.t

(2)

In Eq. (1), the coefcient a is called intrinsic growth rate and m is called decay factor of production, which in Eq. (2) will be substituted by a/R, so that m a=R. (3) In Eq. (3), R denotes ultimate recovery. In general, the coefcients a and m in the rst equation would be determined either by plotting a set of dots, which was used by King Hubbert, or by statistical methods. This paper used the latter approach. Using Chinese coal data for P and Q, we get the regression equation as P=Q 0:0789 0:0011Q, t; 27:52 t; 28:21, r2 0:85; F 67:44. 4 The two sides of Eq. (4) were multiplied by Q in order to get the following equation for P. P 0:0789 Q 0:0011 Q2 . (5)

Fig. 4. P/Q vs. Q 19492004.

0.1 0.075 P/Q 0.05 0.025 0 0 5000 10000 15000 20000 25000 30000 35000 Q,mill.t

From the above-mentioned equations were derived R and the maximum production Pmax : R 0:0789=0:0011 71:73 billion tons and Pmax 0:789 71:73=4 1:41 billion tons: Fig. 6 shows the theoretical curve for Chinas coal according to Eq. (5), but it is not acceptable because the actual output of Chinese coal in 2003 was in fact 1.728 billion tons, i.e., much more than the predicted maximum production. We will ask the whys and wherefores? The value of estimated parameter m by regression is relatively bigger and the corresponding value of R is smaller, that is where the shoe pinches. We know that the ultimate recovery of Chinese coal in 2003 was not 71.73 billon tons

Fig. 5. Linear relationship between P/Q vs. Q (19732004).

Next we can draw the graph of P/Q versus Q, getting something like Fig. 4. For the rst 24 years there is some disorder, but from 1973 onwards, the dots take a negative trend towards the X-axis (Fig. 5). Let us t a straight line to this set of dots from 1973 on, using the linear equation P=Q a mQ. (1)

In this case a is the value P/Q gets when Q is zero and m is the lines inclination. The rst equation can be also

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2500
Actual

2000 Actual; Hubbert 1500 1000 500 0 1949

Hubbert

1959

1969

1979

1989

1999

2009

2019

2029

2039

2049

2059

Year
Fig. 6. The theoretical peak for Chinas coal production according to regression equation, million tones.

but 186.6 billion tons. If 186.6 is being substituted for 71.73 we would predict Pmax as Pmax 0:0789 186:6=4 3:68 billion tons: Using statistical regression for accurately estimating the parameters a and m remains ambiguous. Strictly speaking, the correct tted methodology is still to be found. There is a Chinese proverb called the blind man touches an elephant ,a group of blind persons touch an elephant, one of them touches the thigh of the elephant and shouts this is a door. The parameters a and m are like elephants, the methodology is like a blind person. Thus, considering inherent aws in modelling, various methods should be used. In the following, a new method is presented. 3. A generic STELLA diagram 3.1. Why use the STELLA It is in effect the Hubbert curve, although there are variants such as the Gauss curve, the Cauchy curve, the sine wave and even the parabola. These alternatives give ` re suggests using one of the similar results, but Laherre following formulae to construct the Hubbert curve easier ` re 2000): (Laherre P 2Pmax =1 COSHbt tmax or P 2Pmax =1 COSH5t tmax =c or P 2Pmax =1 COSH6t tmax =d . COSH is the hyperbolic cosine equaling (EXP(x)+(EXP(x))/2. P is annual production; Pmax is production at peak (midpoint of ultimate recovery R); tmax is the year of peak (at half life); c is the duration of the half life from a cut-off at 0.027 Pmax; d is the duration of the half life from a cut-off at 0.01 Pmax.

The factors b, c or d are computed variously from the following relationships: R 4Pmax =b 0:8cPmax 2d Pmax =3, b 5=c and Pc 2Pmax =1 COSH5 0:027 Pmax , b 6=d and Pd 2Pmax 1 COSH6 0:01 Pmax . The Gauss formula is P R=s2pi 1=2 EXPtmax t2 =2s2 , where R is ultimate recovery and s is standard deviation. In practice, the Hubbert curve can be constructed under the procedure as follows: When the status of depletion is post production peak, the peak date (tmax) and the annual production at peak (Pmax) are known, all that needs to be done to construct the curve is to calculate the slope factor b, by applying the formula tmaxtc c 5/b with tc when Pc 0.027 Pm. It may be further checked by making sure that b is the average of 5/c and 6/d, where tmtd d 6/b with td when Pd 0.01 Pm. The Ultimate should also be equal to 0.8cPm. When the status is pre production peak but post inection, the inection point in time (ti) and amount (Pi) corresponds with the maximum of the derivative and can be computed: Pmax 1:5 Pi , tmax ti 1:317=b ti 0:263c, R 0:8cPm 1:63Pi ti tc . Using the system dynamics model including the STELLA to treat these complex calculations achieves several advantages (Tao, 2000). Firstly, due to sensitivity analysis provided by STELLA, no matter what the Pmax, tmax, Pi, Ti are these parameters were calculated with more suitable values automatically. Secondly, with the special STELLA tool casual feedback loop, a number of other relevant parameters were calculated simultaneously if we need, such as R/P (reserves to production ratio), proved reserves, annual proved reserves additions, CO2 emission, etc. Thirdly, a policy test can be conducted. Fourthly, the cost for calculations is the lowest compared with other methods.

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production

until 2004 cumulative prd

actual production ultimate recovery cumulative production hubbert production

K CO2 growth rate

We have designed a generic diagram for the Hubbert Peak model. There are two ow variables, two stock variables, and seven auxiliary variables (converters) (Fig. 7). As long as we have the available statistical data for the two variables P (annual production) and the estimated UR (ultimate recovery), and only these two, it may be easier to predict at what time the Hubbert Peak would appear. Our experience demonstrates this generic model as being robust as well as adaptable to continuing research for even better results. The rst step in the procedure of modelling the Hubbert Peak is to copy into the so called table function the statistical data underlying the above diagram, which is called production. The second step is to write the inow equations, for example the Inow variable Hubbert_production is as follows: hubbert_production IF TIMEo 2004 THEN actual_production ELSE 1 cumulative_production=ultimate_recovery cumulative_production unit one hundred millon tons For reference, other equations are presented in Appendix.

export factor

emission factor

Fig. 7. A generic STELLA diagram.

Coal production elasticity

3.2. Scenario analysis

high K =0.076

low K = 0.068

high Driving forces of CO2 emission K=0.060 low

There is not only one possible future, uncertainty calls for a variety of futures mapping a possibility space; the choice of parameter K inuencing the development of a given ultimate recovery is in its essence only a testerror procedure. Fig. 8 shows a two-axis scenario matrix used in this paper. We make three different scenarios for the parameter K under the assumption that the ultimate recovery is kept constant at 2226 Mt. 1. K 0.060: Low coal production elasticity, low driving forces of CO2 emission.
40 35 30 25 20 production hundred Mt

Fig. 8. Scenario matrix.

2500 cumulative hundred Mt 2000 1500 1000 500 0

15 10 5 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 2024 2029 2034 2039 2044 2049 2054 2059 2064 2069 2074 2079 2084 2089 2094 2099
cumulative production

0 year

Fig. 9. The standard run (K 0.068, UR 2226 hundred billion tons).

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2. K 0.068: Standard. 3. K 0.076: High coal production elasticity, high driving forces of CO2 emission. The standard run for this model assumes the values for parameters K 0.068 and UR 2226 1866+360. The 1866 million tons are the estimated Chinese proved recoverable reserves, which in 2002 was declared by the Chinese Ministry of Land and Natural Resources. The value 360 hundred billion tonnes is the cumulative production from 1949 to 2004. Main results from the standard run are shown in Fig. 9 and Table 1. According to the standard run, the Hubbert Peak for Chinas raw coal production appears to be in 2029 with a value of 37.84 hundred million tonnes. What is the production peak to demand, particular to demand of
Table 1 The main results of simulation Output hundred million tons Cumulative production hundred million tons 0.32 92.03 298.23 382.03 403.93 426.80 485.61 789.30 1119.84 1801.13 1989.25 2100.00 2160.67 2192.61 2209.05

1950 1980 2000 2005 2006 2007 2010 2020 2029 2050 2060 2070 2080 2090 2100

0.32 6.2 9.98 20.95 21.90 22.87 25.82 34.64 37.84 23.38 14.39 8.08 4.31 2.24 1.22

(20.54) (22.22) (23.60) (25.00) peak production

post-peak period? To answer this question we should get some long term forecasting results. But the time spaces of existing forecasts of Chinas primary energy demand are mostly medium and we nd only one forecasting report till the year 2050, that is the Chinas energy future: LEAP tool application in China (Guo et al., 2003). It presents that Chinas coal demand at 2050 would be about 1786 Mtce or 2500 (1786/0.7143) Mt of raw coal and possess 42.6% of total primary energy. The gure of coal demand, 2500 Mt, would be beyond possible supply, which is 2338 Mt (Table 1) according to the Hubbert curve of standard run. The gap between coal supply and demand will be 7% of demand at 2050. Notably, the sustainability of Chinese coal dominated energy policy will be challenged seriously by this so-called Hubbert Peak. In the coming decades, China should nd a new energy development policy related to supply diversication. The Chinese diversication index of energy supply is within 2.53.0 (Guo et al., 2003), but we suggest it should be greater than 4. Results for these three scenarios are shown in Fig. 10 and in Table 2. The scenario analysis for parameter K showed that, at constant UR, peak production increased at an earlier peak time and vice versa. Then the Chinese coal peak may appear between 2027 and 2033, and the peak production may be between 33 hundred million tons and 42 hundred million tons. In other words, the capacity of the Chinese coal supply may continue to rise within the coming 20 years
Table 2 The result of simulations for three scenarios Scenario 1 Scenario 2, Standard run K 0.068 2029 37.84 Scenario 3

Note: The gures in the bracket are Chinas ofcial predicted value, Development report 2006, DSRT (Development Research Center of State Council P.R.China).

Peak time Max. production Mt

K 0.060 2033 33.39

K 0.076 2027 42.29

45 40 production hundred Mt 35 30 25 20 15 10 5 1949 1955 1961 1967 1973 1979 1985 1991 1997 2003 2009 2015 2021 2027 2033 2039 2045 2051 2057 2063 2069 2075 2081 2087 2093 2099
K=0.060 K=0.068 K=0.076

year

Fig. 10. Three scenarios.

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3152 Z. Tao, M. Li / Energy Policy 35 (2007) 31453154 Table 3 Main predicting indicators according to these three scenarios Scenario Year GDP at 2000 xed price, million yuan (1) 1,332,800 1,426,090 1525,920 1,632740 1,747,030 1,869,320 2,609,570 3,575,330 4,898,520 6,946,392 1,332,800 1,426,090 1525,920 1,632740 1,747,030 1,869,320 2,609,570 3,575,330 4,898,520 6,946,392 1,332,800 1,426,090 1525,920 1,632740 1,747,030 1,869,320 2,609,570 3,575,330 4,898,520 6,946,392 GDP growth rate % (2) Coal output , hundred Mt (3) 20.95 21.90 22.87 23.85 24.83 25.82 30.60 34.64 37.21 37.84 18.17 18.89 19.63 20.38 21.13 21.89 25.64 29.05 31.70 33.18 23.01 24.17 25.36 26.55 27.76 28.97 34.82 39.55 42.08 41.71 Coal output growth rate % (4) 10.17 4.53 4.43 4.29 4.11 3.99 2.97 1.99 0.90 0.02 7.67 3.85 3.76 3.66 3.56 3.46 2.87 2.19 1.41 0.56 15.06 4.81 4.66 4.51 4.35 4.18 3.20 2.03 0.68 0.76 Coal intensity, tons/ ten thousand yuan (5) (3)/(1) 1.57 1.54 1.50 1.46 1.42 1.38 1.17 0.97 0.76 0.54 1.36 1.32 1.29 1.25 1.21 1.17 0.98 0.81 0.65 0.48 1.73 1.69 1.66 1.63 1.59 1.55 1.33 1.11 0.86 0.60 Coal production elasticity (6) (4)/(2) 1.27 0.60 0.63 0.61 0.59 0.57 0.42 0.31 0.14 0.00 0.96 0.51 0.54 0.52 0.51 0.49 0.41 0.34 0.22 0.09 1.88 0.64 0.67 0.64 0.62 0.60 0.46 0.31 0.10 0.13 CO2 emission from raw coal Mt 1252 1309 1366 1424 1483 1542 1832 2082 2250 2300 1105 1149 1194 1239 1285 1331 1559 1766 1928 2017 1399 1470 1542 1614 1688 1761 2117 2404 2558 2536

K 0.068

2005 2006 2007 2008 2009 2010 2015 2020 2025 2030 2005 2006 2007 2008 2009 2010 2015 2020 2025 2030 2005 2006 2007 2008 2009 2010 2015 2020 2025 2030

8 7.5 7 7 7 7 7 6.5 6.5 6 8 7.5 7 7 7 7 7 6.5 6.5 6 8 7.5 7 7 7 7 7 6.5 6.5 6

K 0.060

K 0.076

Note: Estimated of CO2 emissions were derived using average emission factor for the consumed coal, the consumed coal are estimated by 95% coal annual production and 5% coal production for export.

before the limit comes. The other relating indicators are presented in Table 3. 4. Conclusion China is presently the worlds greatest coal producer and accounts for about 30% of the worlds total annual coal production. China is also the worlds greatest coal consumer, accounting for more than 28% of the worlds total annual coal consumption. China has a surplus of coal, and is seeking to export the extra coal to other markets in Asia. Domestically, coal currently accounts for about twothirds of Chinas total energy usage and is responsible for fueling 7080% of power generation, 75% of energy used in industry, and even 80% of household energy. China plans to increase coal production by about 35% within 5 years. The production of coal elds generally appears like a bell-shaped curvea gradual increase to maximum output, then a short peak and a gradual decline. Some people thought the capacity of coal supply only depended on the

economical cost and technological factors, but did not consider the life cycle of coal elds, namely, that once the output has reached Hubbert Peak, no matter by whatever effort, one cannot increase production. According to this simulation, thanks to STELLA software for system dynamics, the peak in China comes between 2025 and 2032 with peak production about 33394452 million tons. Chinese raw coal output will grow by about 34% annually before the peak, which probably is a good chance for the development of Chinas coal industry. However, the corresponding amount of greenhouse gases produced may act as an enormous obstacle to increasing the coal production. China should begin with the new strategies, including taking effective measures to enhance the development of clean coal technology, such as coal preparation briquette (CPB), coal water slurry (CWS), coal gasication, coal liquefaction, which can stimulate economic growth, energy efciency, lower coal transportation costs and reduce particle emissions. Since1949 the so-called energy policy The coal dominates energy determined Chinese energy production

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and consumption, but post-coal Hubbert Peak it will be challenged because the capacity of coal supply reaches the limit. To meet the increasing demand, China should consider new energy development policies related

to supply diversication before the peak comes. The Chinese diversication index of energy supply is now around 2.53.0, but we suggest it should be greater than 4.

Appendix. STELLA Equation

cumulative_production(t) cumulative_production(tdt)+(hubbert_production)dt, INIT cumulative_production 1, Unit one hundred million tons Inows: hubbert_production IF TIMEo 2004 THEN actual_production ELSE (1-cumulative_production/ultimate_recovery)cumulative_production K until_2004_cumulative_prd(t) until_2004_cumulative_prd(tdt)+(actual_production)dt INIT until_2004_cumulative_prd 1, Unit one hundred million tons INFLOWS: actual_production IF TIME o 2004 THEN production ELSE 0 Unit one hundred million tons CO2 hubbert_prodution emission_factor export_factor, Emission_factor 0.629 export_factor 0.95, growth_rate DERIVN(hubbert_production,1)/hubbert_production 100 K 0.068, ultimate_recovery IF TIME o 2002 THEN 718 ELSE 1866+718, Unit one hundred million tons, production GRAPH (TIME), (1949, 0.32), (1950, 0.43), (1951, (1956, 1.10), (1957, 1.31), (1958, (1963, 2.17), (1964, 2.15), (1965, (1970, 3.54), (1971, 3.92), (1972, (1977, 5.50), (1978, 6.18), (1979, (1984, 7.89), (1985, 8.72), (1986, (1991, 10.9), (1992, 11.2), (1993, (1998, 12.5), (1999, 10.5), (2000, Unit one hundred million tons. 0.53), 2.70), 2.32), 4.10), 6.35), 8.94), 11.5), 9.98), (1952, (1959, (1966, (1973, (1980, (1987, (1994, (2001, 0.66), 3.69), 2.52), 4.17), 6.20), 9.28), 12.4), 11.6), (1953, (1960, (1967, (1974, (1981, (1988, (1995, (2002, 0.7), (1954, 0.84), (1955, 0.98), 3.97), (1961, 2.78), (1962, 2.20), 2.06), (1968, 2.20), (1969, 2.66), 4.13), (1975, 4.82), (1976, 4.83), 6.22), (1982, 6.66), (1983, 7.15), 9.80), (1989, 10.5), (1990, 10.8), 13.6), (1996, 14.0), (1997, 13.7), 13.8), (2003, 17.3), (2004, 19.6)

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