China just hit an important milestone on its way towards weaning itself off of coal and clearing its smoggy skies: Natural gas is flowing for the first time at a deepwater field. The WSJ reports:
The US$6.5 billion Liwan-3 project, operated and 49% owned by Canada-listed Husky Energy Inc., is in undisputed Chinese waters about 325 kilometers southeast of Hong Kong. Beijing wants to increase gas use to around 10% of China’s energy mix by 2020 from less than 5% now as part of a push to wean the country off coal, which supplies around two-thirds of its fuel and produces huge amounts of pollution and greenhouse gases.“Liwan is Husky’s largest project to date and places us inside the door of one of the fastest-growing energy markets in the world,” said Chief Executive Asim Ghosh, in a news release issued here Monday to mark the first gas flow. “It was a massive undertaking and is a great achievement for deep-water gas production in the Asia-Pacific Region.”
There are two more gas fields in the same region, and producers will use shared infrastructure to bring the offshore gas to market. The second of those fields will start producing later this year, while the third should come online around 2016–17, bumping up the total production to as much as 500 million cubic feet of gas a day.China intends to more than double its use of gas by the end of the decade, and developments like this one are important steps towards that goal. The country’s ability to successfully tap its reserves of shale gas—the largest in the world—will be critical for meeting that target, and there have recently been reasons for optimism on that front as well.As heartening as this news is for Beijing’s central planners, this is even better news for greens. China accounts for roughly half of the world’s coal consumption, and its reliance on the cheap but dirty energy source is not only choking the skies of its megacities; it is accounting for a very large slice of the global greenhouse emissions pie. Natural gas burns cleaner, and to the extent to which it displaces coal use it will have real and lasting benefits for the environment.