The draft of China's first energy law, which will shape the country's energy policies, will be completed by the end of the year, sources with the National Development and Reform Commission (NDRC) said Tuesday.

The law will paint broad brush strokes and not delve into details of each sector in the industry, according to experts.

A team led by the NDRC and comprising 15 ministry-level departments was set up at the beginning of this year to frame the law.

It will override current industry laws such as the Electricity Law and the Coal Law, and serve as a guideline for the legislation of any future laws on a certain energy sector, said Zhou Dadi, a researcher with the Energy Research Institute affiliated to the NDRC.

"It will be like a 'constitution' for the energy industry," Zhou said, adding that the preliminary draft will be completed by the end of next month.

Though the details of the draft are unknown, media reports have said that it would be a comprehensive law covering resource exploitation, production and transportation, consumption, and conservation.

At a recent discussion, energy experts called for the law, which may take up to two years to be passed, to define regulations for foreign acquisitions and set up an umbrella body to approve all energy projects, Xinhua News Agency reported.

Energy security will be an important component, experts said.

Chen Shouhai, a professor at China University of Petroleum, said the law will underscore the necessity of strategic reserves of important energy sources such as oil.

"The energy law will help facilitate promulgation of a series of new laws in the industry," he said.

Han Xiaoping, president of the China Energy website (china5e.com), agreed. "The law, given its significance, will help break down the barriers between different interest groups in the energy field."

Han suggested using the country's huge foreign reserves, about US$1 trillion, to build up a strategic reserve.

China now has four energy laws, covering the coal, electric power, energy conservation and renewable energy sectors.

(Xinhua News Agency November 29, 2006)