Your Oasis Of
recognize the need to improve on the North American model of extraction by brute force, developing technologies to both in- crease profits and lessen environmental damage. Regardless, in the short term China is likely to remain rhe-
torically bullish on unconventional gas, if only to promote cho- sen industries and facilitate haggling for long-term gas supply contracts with foreign trading partners. Over the next several decades, the project to bring difficult-to-extract gas into the do- mestic market will indeed change China’s relationship with its foreign trading partners. It will reorganize the roles of the do- mestic energy industry by bringing them into increasingly direct competition with one another. And it will provide fresh oppor- tunity for foreign energy giants and smaller private firms on the cutting edge of research and exploration.
Sitting on a gas mine
Geologists have known for decades that China has little in the way of conventionally extractable natural gas, but it wasn’t until recently that the country’s vast unconventional energy reserves were revealed. Unconventional gas, or natural gas that is locked in rock
formations, already makes up some of China’s energy mix: Te country produced about 3 trillion cubic feet (tcf ) of gas in 2009, nearly one-third of which came from tight gas, which is trapped in sandstone or carbonate. Producers also pumped 35 billion cu- bic feet of coal-bed methane (CBM) out of China’s extensive coal reserves in 2009. However, geological data indicate the real opportunity is in
shale gas, which China does not yet produce commercially. Ac- cording to information released by the US Energy Information Administration (EIA) in April, China has 1,275 tcf of tech-
China Economic Review • May 2011 31
Tranquility From The City … Within The City!
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