Challenges for shale gas in China

drilling rig at sunset

The shale gas fracking boom in the United States has been a game-changer for the US economy and energy needs. Now other countries are looking to exploit this potential in their own country, and the potential in China is huge. That said, there are also many challenges to making this a reality in China.

In China there’s a giddy feeling that the next energy gold rush is about to begin. Beneath the mountains of Sichuan province, the deserts of Xinjiang, and elsewhere, China contains twice the shale- gas reserves as the U.S., says the U.S. Energy Information Administration. China’s national planners enthusiastically back boosting natural gas production, which accounts for just 4 percent of the country’s total energy mix now. The government wants to double that share by 2015. “There’s a lot of exuberance,” says Zhou Xizhou, who leads the research firm IHS Cera’s China Energy practice. “In Beijing, if you work in energy, you probably receive a shale-gas conference notice every week.”

The impact of a shale-gas boom in China will be enormous, with the potential benefits and likely environmental costs perhaps even greater than in the U.S. So far, though, the output in China has been a trickle because of the challenging geography and the monopolistic structure of China’s oil and gas sector. While about 200,000 of the horizontal wells used in fracking have been drilled in the U.S., China has about 60. China has 1,275 trillion cubic feet of shale-gas reserves, compared with 637 trillion cubic feet for the U.S.

The U.S. shale-gas revolution was launched largely on the flatlands of Texas, North Dakota, Pennsylvania, and other accessible areas. In China’s mountainous Sichuan basin, “the formations seem to be more faulted and folded, which makes it more difficult and less economic to drill long horizontal well bores,” says Briana Mordick, an Oil & Gas Science Fellow at the Natural Resources Defense Council and formerly a geologist at Anadarko Petroleum.

It will be interesting to see how this develops. Some environmentalists hate the fracking boom, while others acknowledge that new natural gas tends to replace the much dirtier coal as an energy source, which is a huge plus for the environment. China’s future coal plans have terrified the rest of the world. If they can figure out fracking, perhaps the net gains in carbon emissions can be mitigated.

  

Life in Macau


Free image courtesy of FreeDigitalPhotos.net

Here’s an interesting article that explains how there’s much more to Macau than just huge casinos.

Order a generous slice of Macau and you’d be brave to swallow it whole. This is a historical layer cake of clashing flavours. Long, unremarkable centuries of sleepy ancient Chinese fishing villages infused with a whiff of incense from Taoist temples. A slab of Portuguese colonialism – rich, centuries-thick and packed with spices. And on top, a great slathered-on crust of neon candy – luminescent pink, saccharine sweet, saliva-inducing.

It sounds great.

  

Caterpillar gets duped in China deal

Well, this is embarrassing.

Caterpillar, based in Peoria, Ill., disclosed on Jan. 18 that it had uncovered “deliberate accounting misconduct” at Zhengzhou Siwei Mechanical & Electrical Manufacturing Co., a maker of roof-support equipment for underground coal mines that it had acquired last June. Siwei is a subsidiary of ERA Mining Machinery, a Hong Kong-listed firm controlled by a shell company whose principals are two American entrepreneurs in China. Caterpillar paid about $700 million for ERA but said earlier this month it was writing down the value of that company by $580 million. “It’s disappointing,” Oberhelman said. “But how we respond defines us.”

Of course this stuff doesn’t only happen in China. Fraud occurs everywhere. But you would think that a company like Caterpillar would be a little more careful here.

  

Is China Still Developing?

China has officially surpassed Japan to become the second largest economy of the world. No major world actions are taken without China taking part in the process. But still the tag of a developing country is used to describe China. Till when is a country considered to be Developing? Does the sheer size of the country’s population give it the unfair advantage of a developing nation forever? China has become the manufacturing hot spot for automobiles, toys, electronic goods, cell phones, laptops, etc. Apart from that, now thousands of Americans are going to China for jobs. The postcards that are being sent by these people do not say anything about the developing status of China. In fact it can be called as a developed country with problems associated with over explosion of population.

Recently China at the G77 developing nations conference suggested moves to curb climate change by forcing developed countries to give assistance to developing countries like China. The Chinese received a stern reply form United States who completely deny China still being a developing country. The United States have agreed to pay every other developing country except China, rightly so. Instead United States is urging China to invest in carbon caps in other developing nations.

China has one of the worlds largest GDP, but the same can not be said about its annual per capita income, which is around $2,500. This is 4 percent of what the GDP per capita is in United States. Hence the line between developed and developing country is badly drawn. Although million have been successfully lifted from poverty, still millions are left in the same hole. It can be termed as a process of non-trivial wealth. Hence unless the problem of developed or developing country is not solved, there seems to be no solution to the climate change agreements.

  

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