We describe social, economic, and environmental impacts of a demonstration rural energy project in northeast China. Our ethnographic approach illuminates local circumstances, perspectives, priorities, and power structures that influenced and help to explain project outcomes. The project we studied is a village-scale energy project designed to use locally available corn stalks to generate household cooking and heating gas, as well as electricity, in a configuration financially attractive to both potential investors and household consumers. We undertook two three-week field missions, one before the project's trial production period and one during limited trial production, as well as an additional three-day visit to investigate adjustments made to the project on the basis of discoveries during previous visits. We conducted interviews with and on-site observations of village residents, factory workers, project representatives, village leaders, and other key informants. In contrast to electronic communications of satisfactory performance, we discovered low (2 %) capacity-factor operation during a limited wintertime trial production period. We also found a broken contract with the local utility as well as dissatisfaction among users of producer gas due to irregularity of gas flow and flow insufficient to achieve a hot flame. Because the vast majority of households were unable to cook with producer gas during the trial production period, our focus shifted from assessing final impacts to characterizing project status, understanding root causes of trial-period project failures, developing plans to facilitate the project's long-term viability, and offering lessons for future village-scale modern biomass energy projects in rural China. Many of the technical, administrative, and logistical problems encountered by this project were rooted in cultural misunderstandings, which led to poor communication and inappropriate implementation. Ethnographic fieldwork is a critical complement to the technical and economic analyses that guide rural energy development projects. Ethnographic project assessment supports better project outcomes by cultivating continuous dialogue among stakeholders as well as voicing priorities and cultural paradigms of village leaders and residents. To be effective, ethnographic assessment must not be relegated to a report of final impacts, but should be an integral component of project conception, design, and implementation.