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Page added on April 22, 2012
China Begins to Face a New Wealth of Energy
According to estimates from the US Energy Information Administration, China leads the world, with about 36 trillion cubic meters of recoverable shale gas reserves in several basins on land and under the South China Sea. The reserves are believed to be able to meet China’s demands for more than 300 years at the current rate of consumption. _China Daily _ via _ GWPF
Chinese demand for energy and other commodities has boosted world commodities markets to somewhat inflated levels. As the Chinese economies moves away from its “bubble-growth” scheme to a more balanced economy, and learns to develop its native resources more efficiently, wisely, and in a less corrupt manner, Chinese demand on global commodities markets should begin to ease at least a bit.
Just as shale gas production in the US has reduced its dependence on imports, China hopes that shale gas will play a leading role in the country making the most of its energy mix and curtailing its reliance on foreign imports. To that end, the government has made great efforts to lure more companies into finding and developing this unconventional energy source.
First, it reformed the pricing mechanism in two pilot provinces and let the market decide wholesale prices for unconventional gas, including shale gas. This has created a new incentive for companies to produce shale gas.
Second, China has unveiled some supportive measures for shale gas development. The National Energy Administration established a shale gas laboratory in Langfang, Hebei province, where the national shale gas research center is located.
It also promised to increase investments and set up shale gas special funds to support shale gas discovery and evaluation, as well as relevant technologies on shale gas exploration and development.
In addition, the government is encouraging companies to increase investment in technological research and development by exempting shale gas resource taxes and granting financial subsidies.
Third, in December last year the government approved shale gas to be an independent mining resource, paving the way for Chinese private companies’ entry into the sector, which previously was restricted only to State-owned enterprises. _China Daily
If China truly has the world’s largest reserves of shale gas, and if China can develop its resources free from the corrupt dead-weight of state owned enterprises and regional government moochers, it may begin to learn the valuable secrets of shale gas production which North American producers spent many decades developing and learning.
If Chinese producers can operate relatively free of the rampant corruption that burdens many other aspects of the Chinese economy, they may be able to help under-gird an important new Chinese energy industry — unconventional liquid fuels production. Such an industry might begin with gas to liquids (GTL) and coal to liquids (CTL). But from there it is likely to develop biomass to liquids (BTL) and other “XTL” industries, including gas hydrates to liquids.
Such alternative liquid fuels production would progressively aid China in reducing its expensive oil imports, and would also place a downward force on world oil prices — in the wake of increased supplies. It is likely that OPEC and Russia would reduce production in response to any meaningful growth in XTL production of liquids on the part of China, North America, and other regions rich in unconventional hydrocarbons.
But the very fact of significant XTL production in the face of ample spare production capacity on the part of the world’s big oil exporters, should have a somewhat dampening effect on the somewhat over-enthusiastic global oil marketplace.
China may be developing its new oil & gas resources just in the nick of time: Japanese researchers suspect that the globe may be on the brink of a period of significant global cooling h/t GWPF
8 Comments on "China Begins to Face a New Wealth of Energy"
Arthur on Sun, 22nd Apr 2012 11:47 pm
“The reserves are believed to be able to meet China’s demands for more than 300 years at the current rate of consumption.”
Can I buy a new Porsche afterall?
The question of course is: how high is current rate of consumption? If it is relatively small than the statement ‘300 yr…’ is meaningless.
BillT on Mon, 23rd Apr 2012 1:23 am
More BS from the oil world pimps. A lot of ifs and maybes here. Not one word about the pollution it causes, or the possibility that all of those reserves are NOT recoverable. And, at current growth of 7%, 300 years shrinks to 30, or less. No country in the world is going to be using oil or natural gas by 2050.
None. Unless the total economy collapses and the world goes into a permanent depression. But, if that happens, there will be no money to drill and use it anyway.
Arthur on Mon, 23rd Apr 2012 9:58 am
“China leads the world, with about 36 trillion cubic meters of recoverable shale gas reserves”
36T m3 gas = 36,000,000,000,000 m3 is roughly the equivalent of 36,000,000,000,000 liter of oil [*] or 226,415,094,000 barrel or 226 billion barrel of oil or maybe 100 billion barrel of oil after taking EROI into account. That is 3-4 years of global oil consumption.
So the remark in the article: “the reserves are believed to be able to meet China’s demands for more than 300 years at the current rate of consumption”… might be true, but is misleading, because it does not say what the current level of consumption is. Oil consumption of China was ca. 10 million barrel a day in 2010. This means that shale gas can replace current chinese oil demand for 10,000 days or 30 years.
Admittedly not bad.
[*]
1 cubic metre of natural gas
8,8 kwh
31,7 mJ
1 litre of petrol
9,1 kwh
32,6 mJ
Arthur on Mon, 23rd Apr 2012 11:35 am
Maybe I am too pessimistic regarding EROI values of 2 with respect to shale gas.
http://www.energybulletin.net/stories/2011-08-19/shale-gas-eroi-preliminary-estimate-suggests-70-or-greater
Mind you, this is the periodical of Richard Heinberg, a leading ‘peaker’. If this (EROI=70) is true, than China has in fact a natural gas equivalent of present day level of oil consumption for 22,000 days = 60 year. This would mean doom is not immanent, at least not for China.
Arthur on Mon, 23rd Apr 2012 12:11 pm
However the same Heinberg recently twittered that “Why shale gas WON’T be a game changer for China” and pointed to this article:
http://www.atimes.com/atimes/China_Business/NB18Cb01.html
The article confirms the EIA 36T m3 figure, but reduces this to 25T, used by the Chinese. Next the article says that in fact the geological conditions in China are such that recovery is not that easy and that the required technology is more difficult. China tries to get access to that technology in the US and Canada.
But even 25T m3 is impressive as it represents 40 years of current oil consumption levels. Until now I associated shale with shale oil only, which does have low EROI.
BillT on Mon, 23rd Apr 2012 1:37 pm
Arthur, you are correct. If China can maintain a growth of even 5% for a few decades (yes, that is a stretch, but if) then that 40 to 60 years becomes 30-45 years. At 7% it becomes about 22 to 30 years. Yes, it looks good for China, but, is it really possible? After all there is more gold in the water of the 7 seas than have ever been mined in the history of the world, but there it will stay because it cannot be recovered efficiently.
Arthur on Tue, 24th Apr 2012 7:48 am
If it is true that shale gas has an EROI of 70, as even the postcarbon institute seems to admit, than the gas will be harvested, even if it devastates the environment. Environment is good, survival is better, as any fox or rabbit can confirm. In contrast the gold will remain in the oceans because the ROI is smaller than 1.
Arthur on Tue, 24th Apr 2012 7:51 am
The fox and rabbit refers to the story presented in another thread:
http://peakoil.com/consumption/the-story-of-rabbit-island