China’s Shale Gas Development Potential

China’s potential in shale gas production is nearly as staggering as its potential growth in demand for natural gas. The U.S. Energy Information Administration estimates that China possesses by far the world’s largest reserves of technically recoverable shale gas. Although China’s shale gas industry is not as advanced as the United States’, it could be the most advanced outside of North America. China’s target is to produce 60 billion to 100 billion cubic meters of shale gas by 2020, but there are severe limitations to hitting the target. China is more likely to produce somewhere around 25 billion cubic meters of shale gas by then. In total, China will realistically be able to access 275 billion cubic meters to perhaps 300 billion cubic meters of natural gas from land-based (both piped and domestic) sources by 2020. It remains unclear whether this will be able to satisfy most of China’s demand. Should China’s demand reach higher estimates, such as Barclay’s 450 billion cubic meters by 2020 or the Chinese Ministry of Land and Resources’ 380 billion cubic meters, China could be forced to import as much as 150 billion cubic meters of liquefied natural gas by 2020. 

That kind of demand could very easily overwhelm liquefied natural gas markets internationally, ensuring that liquefied natural gas supply diversification will not lead to lower prices. However, this is unlikely, because there will remain an intrinsic link between China’s domestic supply and domestic demand. While China has been pushing for natural gas to offset coal and oil, Beijing still must balance two competing needs: the need for natural gas to replace those other sources and the strategic risks of overreliance on foreign sources of natural gas (as opposed to coal, which it can largely produce domestically). As a result, China’s overall demand for imported natural gas — including liquefied natural gas — will be related to the success and pace of its shale gas development.

Additionally, the most likely scenario in which China’s liquefied natural gas demand would increase dramatically is one in which liquefied natural gas prices do not skyrocket but are low enough that it would be worth importing large volumes of natural gas despite the strategic losses. Either way, China would still be importing small volumes of liquefied natural gas and has every interest in working with Japan, South Korea and other liquefied natural gas importers in order to manage prices. However, China’s potential demand spikes leave those other liquefied natural gas importers worried — especially those, such as Japan, that have few options other than importing liquefied natural gas.

14 Comments on "China’s Shale Gas Development Potential"

Makati1 on Wed, 19th Mar 2014 5:43 am 



It will obviously go to the highest bidder, as it always has. ^_^

Arthur on Wed, 19th Mar 2014 7:48 am 



Dutch proverb: when one sheep is over the dam, more will follow.

The fossil fuel age is not over in a long shot.

Oil out, gas in.

Javier on Wed, 19th Mar 2014 9:13 am 



Hello,
Is it possible that you show the QR code along with the BTC adress so it is possible to scan it from my phone and donate bitcoins ?

Thanks,

Javier

Papasmurf on Wed, 19th Mar 2014 9:24 am 



Global warming vs Energy crisis, we cannot have both.

It looks like Global warming has the advantage.

Arthur on Wed, 19th Mar 2014 10:24 am 



Indeed Papasmurf. The only potential rescue could be that prices for shale fossil are high to the extent that everybody will try to flee into wind/solar, even before shale fossil will run out.

Just made my bicycle trip to the groceries store and noticed yet another 3 extra houses with solar panels on the roof as compared to last week.

Davy, Hermann, MO on Wed, 19th Mar 2014 10:55 am 



Arthur, bycylist here too. I use mine to get around the farm. Sometimes I need 2 pieces of equipment so I carry the bike on one and ride back to the barn to get the other. Unfortunately I cannot afford hired help most of the time.

Davy, Hermann, MO on Wed, 19th Mar 2014 11:12 am 



Sure we can Poop, why not. Both crisis will happen exclusive of the other. Both are already in motion without the other. Both will enhance the decent. Poop, join the doomers and your cognitive dissonance will go away!

Kenz300 on Wed, 19th Mar 2014 12:34 pm 



Buy a bicycle, walk more or take mass transit.

Cities need to become more people centered and less automobile centered.

Climate change will impact us all.

Northwest Resident on Wed, 19th Mar 2014 2:31 pm 



“China’s potential in shale gas production is nearly as staggering as its potential growth in demand for natural gas.”

Great! Scraping the bottom of the barrel for the last remaining drops of oil/gas energy will continue for a while longer. Environmental damage? Climate change? Who cares! We’ve got enough gas to drive today, so why worry about tomorrow?

Laci on Wed, 19th Mar 2014 2:37 pm 



I think the EU “geniuses” just made sure that China will have more pipeline imports available from Russia, thanks to EU decision to enter a pissing contest with the Russians over Ukraine. Among their brighter ideas was to delay the South Stream pipeline.

I have a feeling that the current volume of 80 billion cubic meters transiting through Ukraine towards EU will be found to be flowing to China by 2020, while the EU will be the ones importing the more expensive LNG.

rockman on Wed, 19th Mar 2014 3:21 pm 



NW – “Who cares!”. Hey…us barrel scrappers care a hole lot. LOL.

Northwest Resident on Wed, 19th Mar 2014 3:41 pm 



“…us barrel scrappers care a hole lot.”

Yeah — and a LOT more people than just the folks actually doing the barrel scraping too. And those that don’t care SHOULD care, and would if only they were smart and/or informed enough.

“… a hole lot.” Ha! I bet that was intentional, coming from a guy who drills holes for a living, and lots of them.

foxv on Wed, 19th Mar 2014 5:28 pm 



Sinkholes, toxic waste, leaks, rail car explosions!
The US is having a hard enough time managing fracking. The Chinese are now going to take on these challenges?

China is a bomb with a “Made in China” label on it. XD

Good luck guys.

ian807 on Wed, 19th Mar 2014 6:09 pm 



The interesting question with fracked natural gas is, “how long will it last once oil gets too expensive to use?” That day is not long in coming. Whether natural gas is used directly as transportation fuel, or converted to liquid hydrocarbons, it will be used. At that point, the predictions of “100 years” of natural gas will have to be adjusted to the new reality of massively increased production. In the USA, I calculated the entire supply of fracked natural gas might extend the life of hydrocarbon based energy by about 20 years, based on the amount of energy it contained. China will most likely use more, but then, they may have more. As far as I know, the jury is still out on what they have.