Powermag: China’s Shale Gas Development Outlook and Challenges
Developing and using shale gas could alleviate fossil fuel shortfalls in China, enhance that nation’s energy security, and contribute to economic and social development. Though the government has plans to utilize its buried shale resources, significant barriers to that plan remain.
Thanks to sustained and rapid development of China’s economy, demand for natural gas has been increasing. From 2000 to 2010, China’s demand for natural gas increased from 24.7 billion cubic meters (bcm) to 107.2 bcm; the average growth rate was about 16%. Furthermore, by 2009, natural gas demand exceeded supply in the Chinese market. China’s conventional natural gas production exceeded 100 bcm for the first time and reached 102 bcm in 2011, but the growth rate of yields was only 8.45%—lower than the average of 13.07% in the past decade.
Additionally, China’s dependence upon traditional energy imports is increasing yearly. Dependence upon foreign oil reached 53.8% in 2011, and net imports of coal were about 146 million tons in 2010, with year-on-year growth of more than 41%. Natural gas imports have been steadily increasing as Chinese natural gas demand has been growing faster than that of coal and petroleum.
China’s high degree of dependence upon traditional energy imports is becoming a serious threat to the country’s energy security. Oil can be purchased from the international market; however, natural gas imports are limited by the fact that regional distribution is mainly by pipelines, which are limited in adjacent countries.
It is predicted that China’s natural gas consumption will maintain an annual growth rate of 25% in the next five years and that demand will reach 170 bcm to 210 bcm in 2015. However, it is also estimated that natural gas production will be only 140 bcm in 2015, with a growth rate of only 15%, which is far below that of consumption increases. The gap between supply and demand for natural gas in China will continue to expand in 2015, reaching 50 bcm. MORE