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Frack, Comrade, Frack!

Greens often hold up China as a model for smart policy because of things like its investments in solar power and high-speed rail. Via Meadia is now waiting for greens to celebrate the newest energy initiative to come from the People’s Republic: fast track frack. Bloomberg reports:

China pledged to prioritize land approvals for shale-gas exploration, allow tax-free equipment imports and offer subsidies to companies including PetroChina Co. (857) tapping the largest reserves of the unconventional fuel.

The country aims to produce 6.5 billion cubic meters of shale gas annually by 2015 and ramp up output to between 60 billion and 100 billion by the end of the decade . . . .

Such an impressive foray into shale gas suggests that the Chinese don’t think the green unicorns will provide enough energy for their economy going forward, which is why they are now making massive investments in hydrocarbons.

Ironically, China’s willingness to allow tax-free imports of fracking technology flips one green argument on its head. Activists have traditionally pushed expensive domestic programs and subsidies to develop green technology on the rationale that we can then turn a profit by selling that tech abroad. China is showing that subsidizing frackers can do that just as well. Again, Via Meadia awaits a green endorsement for coal mine subsidies, so that our cutting-edge coal technology can be sold abroad, creating American jobs.

That said, companies taking new tech to China should beware: The Chinese will do everything they can to steal any intellectual property that isn’t nailed down. The best business strategy here is to sell them the rights to the tech upfront, perhaps with a delay figured in; at least that way you get some money out of the tech transfer process.

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  • Brett

    Greens often hold up China as a model for smart policy because of things like its investments in solar power and high-speed rail.

    We do? Every “green” writer I’ve ever read who has talked about Chinese energy policy has pointed out that it’s a mixed bag. They’re investing in solar and hydro-electric power, but they’re also building coal-fired plants at a massive rate.

  • Brett

    Sorry to do another post, but

    The best business strategy here is to sell them the rights to the tech upfront, perhaps with a delay figured in; at least that way you get some money out of the tech transfer process.

    I think the best strategy is to take advantage of your branding power to capture most of the profits. The chinese company might steal your IP, but they don’t have the brand to sell it in the major foreign markets. Instead, they have to work with you, selling their products through you, which allows you to keep most of the money earned from sales while their margins remain razor-thin.

  • Mrs. Davis

    I know I buy my gas based on brand.

  • Corlyss

    Greens

    If you look up the term in a good dictionary, the definition will be “a condition characterized by clogged ideological arteries which result in a singular inability to learn anything different about energy and energy production from what they were taught in the 1970s; a widespread form of luddism concerning fossil fuels that threatens world-wide prosperity based on cheap energy.”

  • Kris

    Putting aside environmentalism, would an energy-independent China have a more or less aggressive foreign policy?

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