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Dethroning King Coal
China's Thirst for Natural Gas Is Growing

It takes a lot to power China’s growing economy, but the coal China is burning (which accounts for nearly half of the world’s consumption of the sooty stuff) is polluting its skies. To decrease its reliance on coal and cut down on the country’s rampant and deadly air pollution, Beijing is investing heavily in natural gas, a fossil fuel that emits roughly half as much greenhouse gases as coal does, and fewer deadly pollutants. In the graph above, sourced from the Energy Information Adminstration’s International Energy Statistics, the enormous growth of China’s natural gas consumption is apparent, as is the country’s increasing reliance on foreign sources to meet demand. The EIA has more:

China relies heavily on domestic coal (and to a lesser extent oil) to meet rising energy consumption. To reduce air pollution and carbon dioxide emissions, the Chinese government is attempting to replace some of the country’s coal and oil use with natural gas. Natural gas accounted for only 4.9% of China’s total energy consumption in 2012, but large investments in domestic natural gas production and infrastructure, along with growing imports, are likely to underpin a significantly larger role in the future. The Chinese government anticipates increasing its natural gas share of total energy consumption to around 8% by the end of 2015 and 10% by 2020.

China is looking to bolster its international gas portfolio, having signed a blockbuster deal with Russia earlier this year, in addition to a number of contracts aimed at beefing up its liquified natural gas (LNG) import capacity. Beijing is also working to develop domestic reserves, including plays in the South China Sea (though the vast majority of hydrocarbons in that volatile region lie within undisputed waters) and, most promisingly, in the country’s vast shale deposits. China has the world’s largest estimated reserves of shale gas, and it is hoping to emulate America by tapping these resources and setting off its own shale boom.

These ambitions have been thwarted, however, by complex geology, regulatory snafus, a lack of technical expertise, scant water reserves, and an underdeveloped oil and gas services industry. But the country’s demand for natural gas is growing quickly. For Beijing, fostering a shale revolution isn’t just an energy or an economic concern—it’s also a strategic one.

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