After more than a decade of spectacular growth fuelled by coal, China finds itself sitting on a bonanza of shale gas. Its reserves are the world’s largest, beating even those of the United States. But developing this vast resource won’t be easy, as a bidding last month for shale-gas leases made clear.

“The resource is huge,” says Jane Nakano, a fellow of the Energy and National Security Program at the Center for Strategic and International Studies in Washington DC. “But the shale deposits are more complex than ours, and the above-ground challenges are probably even larger” than the geological ones.

To offset some of the coal use that contributes to its status as the world’s largest greenhouse-gas emitter, China wants to boost natural gas from around 4% of the country’s energy mix to 10% by 2020. Much of that gas will be imported. But in March 2012, the Chinese government estimated the country’s reserves at 25 trillion cubic meters, and an earlier estimate from the US Energy Information Administration was even larger. China’s leaders resolved to boost annual shale-gas production from near zero today to at least 60 billion cubic meters by 2020. The United States, by comparison, produced more than 150 billion cubic meters in 2010.

There, the abundant, cheap gas has displaced coal as a fuel for power plants, contributing to a nearly 4% fall in the country’s fossil-fuel emissions in 2012. If China could repeat that success, the emissions reductions could be globally significant. But its shale-gas auction — only the second so far — has bolstered skepticism. China’s Ministry of Land and Resources awarded leases in 19 areas, mostly in the nation’s central Sichuan Basin. Analysts were surprised to see national oil and gas companies, such as PetroChina and Sinopec, lose out to state-owned coal and utility companies, as well as to local government entities that have no expertise in the oil and gas arena.

Nakano says that the national oil firms may be playing it safe and did not truly compete to win. Price controls on natural gas may have reduced their appetite for risk, she says, and they have little experience with the hydraulic fracturing needed to release gas from shale.

Shu Jiang, a petroleum engineer who worked in China before moving to the University of Utah in Salt Lake City, is more optimistic, pointing out that major oil and gas companies are investing in shale-gas wells in areas already leased for conventional oil and gas development. He says that early results from the Sichuan basin are promising and that “China’s vast shale resources will be extracted”.

That is unlikely to happen quickly, however, says Julio Friedmann, chief energy technologist at the US energy department’s Lawrence Livermore National Laboratory in California. “In the United States, it took 60 years and 200,000 wells” to lay the groundwork for the shale-gas revolution. China has drilled fewer than 100 wells, and its geology is different. Many of the Chinese shale formations have a high clay content, for instance, which makes them more pliable and less apt to fracture. Many are also deeper. “We simply have no idea about whether or not the geology is going to produce,” Friedmann says.

3 Comments

1. 1. jnrowell 04:35 PM 2/20/13

   It seems China is promoting natural gas extracted from shale as a "green" solution. But there is nothing "green" about shale gas. The process of extracting gas from shale is devastating to the environment, and has contaminated many drinking water aquifers making them forever unusable. Natural gas can be a "green" solution if produced responsibly, for example from landfill gas. But not extracting from shale - please China, don't repeat the same mistake the U.S. has made.

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2. 2. sethdayal in reply to ronwagn 06:12 PM 2/21/13

   Nope real science peer reviewed and published in reputable journal shows us that while NG plant produces less deadly particulate emissions than coal it still spews copious amounts of radioactive radon gas and because of distributrition leakage produces more GHG's than coal per kwh. Still kill lotsa folk just less than coal - Nice!!!!.
   
   Natural gas kills tens of thousands of folks annually while nuke power has never killed a soul.
   
   Nuke power now far cheaper than gas for public power at 4 cents a kwh and is steadily dropping in cost while gas prices will soon triple to 12 cents kwh as prices begin to match cost of production.
   
   if utilities were required to fix and guarantee a gas price for the 60 year life of their proposed "cheap" gas plant with no access to regulatory relief if that forecast were wrong, not a single gas plant would be built in the US. Further since wind and solar depend on that gas plant for backup not a wind or solar project would ever be built.
   
   Fossil fuel plants depend on the regulatory quirk which allows investors to demand rate relief when fuel costs increase.
   
   

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3. 3. dwbd 09:04 PM 2/21/13

   ronwagn is a lobbyist for Big NG. He cut and pastes these same posts on every website, newsite, blog he can find. And he never responds to critique or is willing to debate his outrageous and ridiculous claims.

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