China is an oil-devouring behemoth that is almost entirely dependent on other countries for its energy needs. Also, China is fortunate enough to have massive amounts of shale gas reserves — natural gas that is trapped in sedimentary rock. Sounds like an easy solution, right?
Not really. If it were, China would be tapping that rock. The U.S. Energy Information Administration estimates that China may have as much as 1,275 trillion cubic feet of shale gas reserves — 50 percent more than the U.S., which has already extracted enough natural gas from shale to put it on a path to energy independence. Unlocking those resources would help China meet its enormous energy demands, while allowing it to cut down on coal — one of the main causes of the deadly, off-the-charts pollution clogging up the country.
But progress toward natural gas production has barely budged. So far only 60 shale exploration wells have been set up, compared to about 200,000 in the U.S. And production remains at zero.
So what gives?
According to the Washington Post's Steven Mufson, there are a complicated mix of "below the ground" and "above the ground" challenges.
One below-the-ground problem is the Tarim Basin in Xinjiang. Though it's believed to hold more than a third of China's shale gas resources, the area lacks the water supplies needed for hydraulic fracturing, or fracking — the method used to extract natural gas from shale. China also lacks the pipeline infrastructure to transport the gas to factories and power plants. According to the Washington Post:
That creates a chicken-and-egg problem, said one international oil executive. The Chinese pipeline company doesn't want to build a new pipeline without knowing whether there will be enough gas to justify it. The oil and gas exploration company can't know that without drilling pilot wells, and before doing that, it wants a pipeline. [Washington Post]
The above-the-ground problems are mostly bureaucratic. Unlike in the U.S., where oil companies buy mineral rights, secure permits, and start drilling, in China mineral rights are owned by the state. And there's some confusion over which state agency owns those rights. The National Development and Reform Commission, which oversees oil and gas, is butting heads with the Ministry of Land and Resources, which claims shale is a mineral. Companies are awaiting clarity on who's regulating what before they can even start drilling.
So will China get it together?
Bloomberg Businessweek says analysts think it's only a question of time. When China does, "the impact of a shale-gas boom in China will be enormous, with the potential benefits and likely environmental costs perhaps even greater than in the U.S."
A fracking boom would naturally lead to the kind of environmental concerns that have dogged natural gas exploration in the U.S., including the polluting of groundwater and the release of damaging methane gas. But as Elizabeth Muller at the New York Times argues, in a piece titled "China Must Exploit its Shale Gas":
We need a solution for energy production that can displace the rapid growth of coal use today. Switching from coal to natural gas could reduce the growth of China's emissions by more than 50 percent and give the world more time to bring down the cost of solar and wind energy to levels that are affordable for poorer countries. [New York Times]
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