May 25 (Bloomberg) -- China ordered the operator of the world’s biggest dam to begin disgorging about 5 billion cubic meters of water today to replenish the Yangtze River and counter the Hubei region’s lowest rainfall in half a century.
The Three Gorges Dam will discharge enough water to fill 2 million Olympic-sized swimming pools by June 10, according to a government statement. Lower water levels on the 6,264-kilometer (3,915-mile) river may increase China’s oil demand by 300,000 barrels a day to make up for lost hydropower generation, Barclays Capital said last week.
China’s longest river sustains 65.7 percent of the nation’s paddy fields, according to the Agricultural Yearbook. Poyang Lake, China’s biggest, has shrunk to less than a fifth of its usual area, the country’s meteorological agency said. State-run China Daily said there was 40 percent less water in almost 1,600 reservoirs in Hubei province than a year ago.
“Rainfall along the Yangtze River in April and May was 40-50 percent below the historical average,” said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd. “The cause is being debated, but I think global warming is partly to blame for more frequent extreme weather, and partly the Three Gorges might have stored water in the upper-stream.”
About 4.4 million people and 3.2 million farm animals are already suffering shortages of drinking water, the Office of State Flood Control and Drought Relief Headquarters said May 20.
Hubei and Hunan provinces alone produce about 30 percent of the early indica rice crop, according to the Agricultural Yearbook. Soldiers and armed police are on standby to ensure water supplies to rice fields, the flood control office said.
Early indica rice futures gained for a third day in Zhengzhou, bringing the advance this week to as much as 3.9 percent. The 2.2 percent rise on May 23 was the biggest since Feb. 11.
“The drought’s overall impact on grain production isn’t clear yet,” Ma said. “More acreage was planted with the early indica rice crop, so whether output drops depends a lot on future rain.”
The central government has sent water pumps and diesel generators to help Hubei and Hunan combat the drought.
“The water supply prospects for hydropower companies isn’t good at all as major basin areas are facing severe shortages,” the Hunan branch of the State Electricity Regulatory Commission said in a statement posted on the regulator’s website on May 16.
A drop in hydropower risks exacerbating electricity shortages that China State Grid Corp. said may be more severe than the summer of 2004, the worst on record, according to a May 23 report by Xinhua News Agency.
China slashed exports of diesel by almost half last month to ensure supply of the fuel used in power generation, data released yesterday by the Beijing-based General Administration of Customs showed.
The drought may push up demand for coal for power generation, UBS AG said on May 5.
“While coal burn is likely to rise as baseload generation, diesel’s usage as the swing fuel for power could easily translate into an additional 200,000 to 300,000 barrels a day of potential oil demand,” Amrita Sen, a London-based oil analyst at Barclays Capital, said in a report last week.
Baseload power is delivered at a steady rate around the clock, while diesel is more suited to meeting spikes in demand.
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