State oil and pollution politics blamed for bad air in China

The search for culprits behind the rancid haze enveloping China’s capital has turned a spotlight on the country’s two largest oil companies and their resistance to tougher fuel standards.

Bureaucratic fighting between the environment ministry on the one hand and China National Petroleum Corp (CNPC) and Sinopec on the other has thwarted stricter emission standards for diesel trucks and buses – a main cause of air pollution blanketing dozens of China’s cities.

To be sure, many sources contribute to air pollution levels that hit records in January, but analysts say the oil companies’ foot-dragging and disregard of environmental regulations underscore a critical challenge facing a toothless environment ministry in its mission to curb air pollution.

With widespread and rising public anger changing the political calculus, it also poses a broader question of whether the incoming administration led by Communist Party chief Xi Jinping will stand up to powerful vested interests in a country where state-owned enterprises have long trumped certain ministries in the quest for economic growth at all costs.

“I think the Communist Party’s new government should weaken CNPC and Sinopec,” said Wang Yukai, a professor from the National School of Administration. “These interest groups have too much power.”

Delays in implementing stricter emission standards are rooted in money – chiefly, who should pay for the price of refining cleaner fuels? By some estimates, auto emissions contribute as much as a quarter of the most dangerous particles in Beijing’s air.

To supply cleaner diesel, the oil firms must invest tens of billions of yuan (billions of US dollars) to remove the sulphur content, said Xiaoyi Mu, a senior lecturer in energy economics at the University of Dundee in Scotland.