“China urgently needs new sources of energy, but is shale gas the way forward?”, asked China Dialogue, a global environmental online platform. Click here
According to a Special Report, World Energy Outlook 2011, by the International Energy Agency (IEA), “Based on assumptions of the Gas Scenario, from 2012, gas will rise by more than 50% and account for over 25% of world energy demand in 2035, surely a prospect to designate as The Golden Age of Gas”. Click here
A Map of the world’s gas reserves featured in an article in The Economist (6 August 2011) shows that China and America have respectively the world's largest and second largest technically recoverable shale gas reserve. Click here
According to the China Dialogue article of 26 July, 2012 by Xu Nan and Wang Haotong, “In late 2011, the State Council – China’s highest executive organ – officially recognised shale gas as China’s 172nd “independent mineral resource”, an important milestone. This was followed in spring this year by premier Wen Jiabao’s annual parliamentary report, in which he outlined government intentions to speed up efforts to survey and develop the country’s shale-gas resources”. Premier Wen, incidentally, is well technically-qualified as a trained geologist.
A vital consideration during this trajectory is China’s energy security, as much of China’s continued oil and gas imports are from some of the world’s most unstable regions such as the Middle East and Africa, through sea channel choke points such as the Strait of Hormuz near Iran where events are beyond China’s control, and the Malacca Strait under the sway of America’s 7th Fleet.
So it is no wonder that China is enthusiastic about the prospects of shale-gas on China’s own turf where China is not only poised to become energy self-reliant but a potential energy exporter in the long run.
“But key questions remain unanswered”, continue Xu and Wang, the two co-authors of the China Dialogue article. “what impact will fracking, the controversial technique used to extract gas from shale rock, have on China’s already stressed water resources? Does China have the technical ability to tap these deep underground gas reserves, often located in far-flung and mountainous regions? Who will regulate the business? And how reliant will Chinese firms have to be on more experienced US partners?”
“In the late 1990s, breakthroughs in horizontal drilling and multi-stage hydraulic fracturing techniques in the United States kick-started the “shale gas revolution”. But in China, where the shale gas lies much deeper underground and in tougher terrain than the US, no companies have yet mastered multi-stage hydraulic fracturing. Some say this means China will have to work with American firms. Others worry it will be hard to adapt imported technology and expertise to Chinese geology.”
Bill McKibben, an American environmentalist and founder of the campaign group 350.org, highlights the environmental risks of shale gas exploitation in China in a parallel interview in China Dialogue dated 25 July, 2012.
“One, the extent of damage to water supplies has become clearer, and also the threat of associated damage like earthquakes”. “Two, the methane that leaks from the fracking process has been estimated in some studies to be high enough to make it worse for the climate than burning coal. Three, even if no methane leaks, widespread fracking seems likely to undercut the push for renewables, and the International Energy Agency has said that a gas-dependent world would still have 660 parts per million CO2, a figure that is much too high”, he opines.
In response to the question on comparing the water footprint of fracking against coal (20% of China’s water usage), McKibben points out that it’s not so much water usage but contamination of fresh water sources caused by the resultant wastewater. As to whether shale-gas could provide an interim solution for China as it seeks to wean itself off coal, he suggests that “what we need is an all-out push towards renewables, and here of course China has become a leader. The potential was illustrated in Germany last month, when one day the country generated more than half its power from solar panels within its borders”.
However, while China is leading in the use and development of renewable energies, for a fairly long time, China needs all the energies she can get to drive the country’s relentless industrialization and urbanization, to generate sufficient jobs to absorb China’s massive labour surplus, and to balance the economy with a viable, consumer-oriented middle-class to become a middle-income nation by mid-century. During this trajectory, fossil energy will only drop to 80% by 2020, and 45% by 2050 while new and renewable energies will grow to 16% by 2020 and 45% by 2050, according to a Strategic General Report “Science and Technology in China: A Roadmap to 2050” of the Chinese Academy of Sciences, Springer Heidelberg Dordrecht, London, New York, 2010.
Meanwhile, profits seem to trump everything. According to Xu and Wang, “State-owned energy giant China National Petroleum Corporation (CNPC) has made the fastest progress, obtaining rights to drill four shale-gas “blocks” with good prospects in southern Sichuan and northern Yunnan, and achieving commercial-quality flows at four wells. CNPC is joining forces with Shell, which in March announced it had signed China’s first shale-gas production partnership. The two companies plan to jointly survey, develop and produce shale gas resources”.
“Sinopec has drilled five prospecting wells in Guizhou province and Sichuan, both in western China, and in Anhui province in the east. Another mega state-owned firm, China National Offshore Oil Corporation, is still in the early surveying stages”.
“The country’s big power companies, including Huaneng, Huadian and Honghua, are also getting involved. Between them, these three have signed shale-gas development agreements with local governments in Chongqing city, as well as Hunan and Sichuan provinces”.
“The US State Department’s special envoy and coordinator for international energy affairs Carlos Pascual has been quoted as saying that American oil giants such as Exxon-Mobil and Chevron may benefit by partnering with Chinese firms to develop shale-gas resources”.
Southern Sichuan and Northern Yunnan, for example, are home to some of the world’s most pristine ecosystems. It is hoped that amidst the scramble for energy and profits in the Age of Resource Scarcity, a balance can be struck and effective institutional safeguards can be put in place to conserve some of the world’s most precious ecological heritage not only for China but for the entire world.