China Rapidly Shifting towards Gas from Coal

Sichuan basin China

Credit: PD Photo

Last few years China has been working consistently on developing its shale gas resources. It has achieved mixed success so far and that is mainly due to its geology. But due to the recent developments in shale gas technology, the world’s second-largest economy is on its way to becoming the world’s second-largest producer of natural gas in near future. As of date only four countries in the world – the United States, Canada, China, and Argentina have commercial shale gas production. The technological developments expected to encourage commercial shale gas production primarily in Mexico and Algeria. By the year 2040, these six countries are expected to contribute to 70% of the world’s total shale gas output.

China has been the first countries outside North America to develop shale resources. Although China produces only a small amount of shale gas in terms of volume. It is steadily increasing its ability to extract shale gas. The country’s reserves are estimated to be much more than those of the US – approximately 1.7 times. This makes China, the country with the largest reserves in the world. In the past five years, China drilled more than 600 shale gas wells and produces 500 million cubic feet/day, of shale gas as of the year 2015. China has set the goal of ramping up the production to over 20 billion cubic feet daily by the year 2040. This means shale gas is expected to account for more than 40% of the country’s total natural gas production. And thus by then China will next to the US in commercial shale gas production.

As per World Finance report, “China is still the world’s top energy consumer, having energy consumption 30 % percent higher than that of the US”. China is currently heavily dependent on coal for its huge and growing needs of energy. For the very same reason, China was among the main culprits in the world for greenhouse gas emissions. On the other hand, its oil and gas majors are very badly suffering from low oil prices and also from mature fields, many of which are nearing depletion. And hence natural gas is looked at as a cheaper and cleaner alternative to coal. China is also paying serious attention towards the environmental problems related to coal. China is becoming more diligent about its very high carbon footprint and gas is an alternative to coal since it’s the cleanest (or least-dirty) fossil fuel. Many international gas giants have started betting on China’s shift towards gas.

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