CHAPTER 7. Prospects for Shale Gas Development in China

Abstract

China has the largest estimated quantity of recoverable shale gas in the world. Inspired by the shale gas revolution in the US, China is trying to replicate the successful US experience to produce shale gas to power its economy, which is the second largest in the world, and mitigate the pressure felt from being the world's biggest greenhouse gas emitter. Both optimistic and pessimistic prospects for China shale gas development have been debated in the last several years. The promising prospect of shale gas development in China is based on having the largest shale gas resources in the world, huge internal demand, the government's supportive policy and an established preliminary commercial production. The challenges for China shale gas include: the complex geology in marine, transitional and lacustrine settings; lack of advanced shale gas technologies and experience; insufficient infrastructure; environmental issues, especially the complex tectonic and stress conditions; high clay mineral content for lacustrine shale; harsh ground conditions; and water shortages. These issues have meant that US hydraulic fracturing experiences do not work well for China's shales. However, shale gas provides an indispensable opportunity for China to develop this enormous resources to secure its energy supply gap; power its fast-growing economy; create socioeconomic and employment benefits; mitigate pollution pressure; and increase geopolitical leverage. Increasing knowledge of China's shale geology; Sino-foreign joint exploration; shale gas technologies as commodity; indigenous technologies; and the recent breakthrough of commercial shale gas production in Sichuan Basin have made China's future shale gas plan possible. The full financial and policy support from government to import US equipment and technologies, improve infrastructure, liberalise land and markets for small private companies with capital will facilitate the take-off of shale gas development in China.