Residential gas supply, gas losses and CO2 emissions in China

Abstract

Natural gas has become an important energy source as its combustion is much cleaner than coal combustion and emits significantly less carbon. However, as natural gas combustion does result in some carbon emissions, government policy and monitor are needed to improve natural gas use, and reduce CO2 emissions. Previous research has tended to focus on natural gas production efficiency and the relationships between natural gas and economic growth; however, there have been few papers focused on natural gas consumption efficiency evaluations in terms of urban and industrial energy consumption efficiency and CO2 emissions efficiency. To fill this research gap, this study examined the natural gas consumption efficiencies (Natural gas consumption efficiency refers to the efficiency of natural gas from production to final consumer purchase) in 30 provinces/municipalities/autonomous in China from 2007 to 2016 by collecting and analyzing the main natural gas industry input-output index data: labor, natural gas pipe length, fixed assets, natural gas sales volume, residential gas supply, gas losses, and CO2 emissions. An Undesirable DDF (directional distance function) Dynamic Data Envelopment Analysis model was then used to analyze and compare the efficiencies in each natural gas industry index (gas industry index indicates whole indicator used on efficiency evaluation in this paper, such as labor, natural gas pipe length, natural gas sales volume, residential natural gas supply, natural gas losses, CO2 emission) in each province. We also set carry over variable which can link each period, here fixed assets is set as carry over due to its character that accumulates over period. It was found that the overall efficiency in 16 provinces. had been declining year on year and there were significant improvements needed in natural gas pipe length and natural gas losses; however, it was also found that the natural gas industry in most provinces needed to place greater importance on improving CO2 emissions efficiency. The results indicated that to improve overall gas industry operating efficiency and CO2 emission efficiency, new technologies were needed in several key areas: pipeline design, construction and maintenance management to reduce the loss rate in the old pipeline infrastructure, natural gas facilities to improve energy use, and personnel training and management to improve construction capabilities. This study is an interdisciplinary survey. Natural gas is an energy issue, CO2 emission is an environmental issue, and the method used in this study is DEA which is widely used in management and economic research. Therefore, this study combines different issues and the empirical data of China to do an interdisciplinary research.