China Slows Coal-Liquids, Ethanol Push on Water Fear

Beijing is trying to slow the push on water-intensive alternative energy on mounting signs that China might face a serious water shortage in the future.

This may stymie the second-largest energy consumer’s plans to turn its huge coal reserves and agricultural land into transport fuel, and lead it to continue relying on greater imports to fuel its booming economy, a bullish factor for global oil markets.
An official from the top policy-making body, the National Development and Reform Commission (NDRC), recently said China might halt coal-to-liquids (CTL) projects and stop ethanol production from corn.

Industry officials later said there would be no changes in projects by state-owned companies building CLT demonstration plants, while authorised fuel ethanol plants would not be required to stop churning out fuel ethanol from corn.

But analysts said the NDRC comment reflected a shift in Beijing’s policy as droughts and pollution have led to hundreds of millions of people going without regular drinking water.

“If there’s any issue that can destroy China’s march forward, it’s water,” said Michael Komesaroff, managing director of Urandaline Investments.

Planet Ark