Environmental Engineering Reference
In-Depth Information
If the Chinese can bring their shale gas resources into line with shale
gas in the US, it will give China more leverage in their natural gas
pipeline negotiations with Russia. Therefore, shale gas could be a complete
game changer with huge geopolitical implications. Transforming tradi-
tional importers of natural resources such as the US or China into net
exporters can be a major trigger for massive change in international
relations. When Russia and Persian Gulf countries lose their market share,
a vital source of income and geopolitical advantage, they will have to find
another source of economic growth and political power to prevent do-
mestic uprising.
6 China's Supportive Policies for Shale Gas Development
The shale gas revolution in the US resulted from the confluence of factors,
including: vast recoverable shale gas resources; access to shale gas re-
sources on private lands; tax incentives from the government; economically
attractive natural gas prices from 2007 to 2008; innovative technologies of
horizontal drilling and hydraulic fracturing; and a good pipeline network,
etc. The shale gas industry in China is still in early development, but the
Chinese government has begun to provide strong political support to the
shale gas industry in terms of their policies as a matter of national energy
security.In2009,Chinesepresident,HuJintao,andUSpresident,Barak
Obama, announced a US-China shale gas initiative at top government level
to support China's shale gas development through learning from US
experience.
Since broader social investment was previously precluded from natural
gas extraction, shale gas blocks largely overlap with areas where PetroChina
and Sinopec hold conventional oil and gas rights and, as shale gas devel-
opment is not their priority, this makes it very dicult for other companies
to enter the race. To remove historic barriers for shale gas development in
China, many possible policies learned from the US and adaptations of
China's national conditions have been discussed and reported.
10
In De-
cember 2011, shale gas was recognised as the 172nd mineral in China. This
means that it can now be explored and extracted under an independent
mineral right. It provides private capital with a chance to engage in shale
gas. In 2012, the Ministry of Land and Resources offered a 2nd shale gas
bidding and allowed even small private companies with capital to partici-
pate, which thus attracted more companies than in the 1st license round. At
the same time, the Chinese energy regulator, the National Energy Ad-
ministration (NEA), issued the Shale Gas Industry Policy in late 2013. The
policy recommends certain reforms to encourage more companies to de-
velop shale gas in China and promises to increase financial support for rapid
shale gas exploration and development in a healthy and orderly manner.
Based on this new policy, China's ambitious goal is to produce 6.5 billion
cubic metres (BCM) annually (or 230 billion cubic feet) by 2015, and at least
ten times that by 2020. This will be a huge leap from the estimated 2013
