Rapid Increase in Energy Consumption

     Over the last decade, the PRC's rapidly growing economy has significantly increased its demand for energy.  From 1997 to 2007, China experienced a CAGR of 10% and 13% in the per capita disposable income of urban households and the number of civil motor trucks and vehicles in China, respectively, according to the NBSC and CEIC Data Company Limited although such growth fell in 2008 partly as a result of the global financial crisis.In 2006, the PRC was already the world's second largest consumer, and also the world's third largest net importer, of crude oil.  With the imbalance between the supply and demand of crude oil in China, net imports of crude oil are expected to continue to increase in the future. Crude oil is the main product used to produce conventional diesel.  Part of the imported crude oil in PRC is used to produce diesel in order to meet domestic demand.  China is currently one of the largest consumers of diesel in the world. According to CEIC Data Company Ltd, from 1997 to 2007, sales volume for diesel in the PRC increased significantly from 46.1 million tons to 123.4 million tons, respectively, representing a compound annual growth rate of approximately 10.3%.  Growth in the PRC economy is expected to continue to drive energy demand and consumption growth in China.