China’s Drive for Clean Energy Results in Winter Gas Shortage

china energy 3

China’s efforts to manage its environmental impact, engage in green energy practices, and clear smog appear to have had an unintended side effect, resulting in a fuel supply shortage. A growing number of factories are either closing or operating at reduced capacity, profits are shrinking as supply chains are disrupted, and residents are struggling to keep warm at home and in classrooms as the heating supply dwindles.

Beijing implemented new measures to restrict the use of coal for residential and industrial heating, demanding instead that natural gas be utilized as a cleaner alternative. The measures were intended to align with global clean energy efforts; and in theory, it was a good measure, especially considering a global surplus of natural gas. However, various infrastructure constraints resulted in limited gas use across the country.

china energy 1

 

Wood Mackenzie Senior Consultant Wen Wang stated, “Our supply-demand balance analysis shows that shortages on a large scale could be avoided if all supply sources and infrastructure are running perfectly; however, daily shortage will almost certainly happen if there are cold snaps.”

Data from Reuters suggests that China’s domestic liquefied natural gas price has reached record highs since 2011. Due to social and political fallout stemming from insufficient heating, official action has been undertaken by the National Development and Reform Commission, which issued warnings for market players to stabilize prices and ensure adequate supply.

Gas industry analyst Chen Yunying said, “The situation is quite serious due to the suspension of gas supplies to industrial and commercial consumers in hopes of meeting the demand from civilian use.” In addition to industrial demands to shift away from coal, farm families had also been ordered to dismantle coal-fired furnaces. “The government’s effort to shift from coal to gas as an energy source is a good policy that can improve air quality,” said Yunying. However, “during implementation, some governments went too far and rushed to cut coal supplies when they hadn’t found supplemental gas supplies yet.”

 

china energy 4

 

The issue is particularly troublesome as northern provinces rely on central heating provided by the government. Insufficient heating supplies can make the winter unbearable. However, it is not a long-term issue but rather a seasonal one. Tellurian Chairman Charif Souki stated, “There’s a misconception about what oversupply means.” He continued, “Nobody has real demand for 12 months. You are going to have very significant demand in winter months, less so in shoulder months, a little bit of make-up in summer months too because some places are hot.”

China’s annual gas production is projected to double to 340 billion cubic metres in 2040, after which it is expected to grow even more rapidly and reach 600 billion cubic metres. Government oil companies have begun to spend billions of dollars to build pipelines from gas fields in Russia and Central Asia in an effort to boost imports. According to the official Xinhua News Agency, Russian gas imports “will have far-reaching significance for optimizing China’s energy structure, cutting emissions and improving air quality.”

In the wake of the heating crisis and rising costs, China has announced a five-year plan to convert northern Chinese cities to clean heating during the winter. The plan, which was jointly announced by 10 government agencies, covers 2017 through 2021. According to The Securities Times, the plan includes “concrete arrangements,” which have been made regarding geothermal, biomass, solar, gas, electric, industrial waste, and clean coal-fired central heating.

 

china energy 2

 


Sources:

http://www.michigansthumb.com/news/article/China-suffers-natural-gas-shortage-as-coal-ban-12429713.php

http://www.michigansthumb.com/news/article/China-suffers-natural-gas-shortage-as-coal-ban-12429713.php

https://steelguru.com/power/china-unveils-2017-2021-winter-clean-heating-plan-report/497956

Did you miss this?

Other Popular Stories

  • Magna producing first all-olefin liftgate assembly for Nissan Rogue
  • UPS Canada implementing 50 per cent alternative fuels in fleet by 2018
  • Swiss tech does the impossible, creates white solar panels
  • 3D printed homes in 24 Hours — printed on site: printed villas, offices and floating saunas?
  • Manufacturing output grew again in August
  • Thunder Child, the unsinkable boat? Self-righting, wavepiercing interceptor engineered to be the perfect boat for offshore patrol
  • Expansion of wine and beer sales in Ontario grocery stores condemned by OPSEU
  • Manufacturing sector growth slower in May
  • Scientists make breakthrough in spinal cord injury movement
  • Small business tax rate cut to 3.5 percent will only partially mitigate impact of minimum wage increases, both set for January 1 in Ontario
  • TransCanada's Keystone XL pipeline clears last hurdle in $10 billion project as Nebraska approves 3 to 2
  • Ontario to update Nuclear Emergency Response Plan in the event of nuclear and radiological events
  • Auto industry back on top as Canada's biggest exporter: report
  • Manufacturers group says government policies reflect its input
  • General Dynamic Land Systems $15-billion deal with Saudis at risk over Kingdom's alleged involvement in murder plot
  • BC sees 100,000 LNG jobs, $1 trillion in revenues
  • Study on the Effects of Space on Humans Has Interesting Results
  • Scientists create liquid fuel from solar energy
  • Calgary tech company says radio frequency oil extraction tests were successful
  • Ontario to lose Toyota Corolla production but gain . . . ?
Scroll to Top