Deficiencies in China’s innovation systems for coal-bed methane development: comparison with the USA

Philip Andrews-Speed,Mohammad Usman Zia,Siyuan Chen,Xiangyang Xu,Dingfei Jie

doi:10.1108/jstpm-04-2020-0071

Abstract

PurposeThis paper aims to identify the factors that are constraining technological innovation to support the development of coalbed methane in China.Design/methodology/approachThe analysis applies ideas relating to national and sector systems of innovation to explain why China’s strategies to support research and technological innovation have failed to stimulate the desired progress in coalbed methane production. It also provides a counter-example of the USA that implemented a number of measures in the 1970s that proved very effective.FindingsThe deficiencies of China’s research and development strategies in support of coalbed methane development reflect the national and sectoral systems of innovation. They are exacerbated by the structure of the national oil and gas industry. Key constraints include the excessively top-down management of the national R&D agenda, insufficient support for basic research, limited collaboration networks between companies, research institutes and universities and weak mechanisms for diffusion of knowledge. The success of the USA was based on entirely different systems for innovation and in quite a different industrial setting.Originality/valueThe originality of this analysis lies in placing the challenges facing research and innovation for China’s coalbed methane development in the context of the national and sectoral systems for innovation and comparing with the approach and success of the USA.

Highlights

Efforts to exploit coal-bed methane (CBM) in China date back to the 1980s
Of particular importance is the relatively weak coordination in China’s innovation systems and the low level of diversity in the country’s oil and gas industry. We argue that these differences may be among the factors that have inhibited the required technological innovation needed to support growing CBM production in China
The slow progress of CBM development in China is due to the way in which research and development (R&D) has been organised at both national and sectoral levels

Summary

Introduction

Efforts to exploit coal-bed methane (CBM) in China date back to the 1980s. The initial motivation was the need to produce more energy to support economic growth. An additional driver in recent years has been the policy of substituting gas for coal to reduce air pollution. Production of CBM has risen only slowly and has consistently fallen below formal targets despite substantial government support. This failure is striking when China’s CBM production profile is contrasted with that of the USA (Figure 1), despite China and the US Lower 49 States ranking second and third in the world in terms of estimated CBM resource (Masterlerz and Drobniak, 2020).

Objectives

Findings

Conclusion