China, which is rich in coal but poor in petroleum and gas, may put an end to projects which are designed to produce petroleum by liquefying coal, an official with the country's top economic planning agency has said.

The consideration came after evaluation of the nation's limited energy resources and its econological environment, a deputy director of the industry department of the National Development and Reform Commission (NDRC) told a seminar on China's fuel ethanol development, held in Beijing on Saturday.

"Liquefied coal projects consume a lot of energy, though the successful industrialization of liquefied coal could help reduce the country's dependence on petroleum," said the official who declined to be named.

The Chinese government said earlier it would invest more in developing alternative energy resources including biomass fuel and liquefied coal to substitute petroleum during the 11th Five-Year Program (2006-2010) period, amid concerns over the country's growing dependence on petroleum.

China, the world's second-largest energy consumer, imported 162.87 million tons of oil in 2006, driving the country's reliance on imported oil up 4.1 percentage points from a year earlier to reach 47 percent, official statistics show.

The country is also confronted with huge capital demand and higher consumption of water and coal in producing the liquefied coal, the official said.

A project in north China's Inner Mongolia Autonomous Region with a designed capacity of 1.08 million tons would need more than 50 billion yuan (6.58 billion U.S. dollars) of investment, according to him.

He said the country had begun the coal-liquefying projects without trial industrialization operation, and the technologies involved were not sophisticated yet.

And both coal and petroleum are irreproducible energy resources, he said.

However, the country has never slackened its efforts to find substitutes for petroleum.

China said on Tuesday it has successfully excavated combustible ice--a kind of natural gas hydrate--from below the floor of the South China Sea after nine years of research in this field.

The Chinese government said recently it upheld the development of renewable resources as an important national strategy, and would continue to boost the development of hydro power, solar power, wind power, biomass fuel and methane.

The current seminar was hosted by Chinese Academy of Engineering with sponsorship from Denmark-based Novozymes, the world's leader in enzymes and microorganisms. Discussions focus on the industrializaton of China's fuel ethanol.

Source: Xinhua