Waiting for China's Natural Gas Revolution

Published
American Association of Petroleum Geologists (AAPG)

China plans to significantly increase its natural gas consumption to help cut its appalling air pollution. But natural gas is still a small part of its energy mix. In addition, and to confound environmentalists, a significant part of China’s gas supply comes from Coal-to-Gas technology, which generates large volumes of greenhouse gas and other pollutants, but does allow China to deliver clean-burning gas to locations with severe air pollution.

The Global Times recently reported that, although natural gas production and use is rapidly increasing in China, the fuel comprised only 5.9 percent of the country’s total primary energy consumption in 2013. A few statistics suggest the diversity of China’s gas supply:

  • Coalbed methane production was 441 billion cubic feet (Bcf) in 2012 from both surface wells and coal mines (FGE energy consultancy).
  • In 2011, and the country imported nearly 1.5 trillion cubic feet (Tcf) of liquefied natural gas (LNG) and pipeline gas.(EIA)
  • China’s shale gas production was a miniscule 7 Bcf in 2013.
  • China’s coal-to-gas (CTG) production only started in the past couple of years; the country plans to boost its CTG production to 530 Bcf by the end of 2015.

EIA estimates that China has 1,115 Tcf of technically recoverable shale gas. This huge volume is larger than resources estimated for other countries. Estimates of U.S. shale gas resources vary between smaller than China to about equal to the Chinese potential resource. Remember: the economically recoverable resource is always much smaller than the technically recoverable volume. In addition, the lack of a robust oilfield service industry will increase the cost and time required to develop the Chinese conventional and unconventional  gas.

 

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