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Fracking May be Needed in China to Wean it Off Coal

Environmental Price Might Be Worth Paying if Regulations Enforced

Fracking of China’s huge shale gas reserves will only have a modest impact on the environment if anti-pollution controls—many of them new—are enforced rigorously, says a new report from the U.K.-based Overseas Development Institute (ODI).

The ODI said its appraisal of the prospects for shale gas in China found that many of the environmental impacts posed by the exploitation of shale are “manageable,” and would be covered by existing environmental laws.

“Its development could in principle offer significant net environmental benefits if the gas produced permanently replaces coal and helps set China on a pathway to a renewable-dominated energy system,” said the report.

Reports

04.01.15

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Ilmi Granoff, Sam Pickard, Julian Doczi, Roger Calow, Zhenbo Hou, & Vanessa D’Alançon
Overseas Development Institute
This paper analyses the best available technical, scientific, and engineering literature on the risks and opportunities posed by shale gas, and also what policy environment could maximise the opportunity and minimise the risk. It also analyses China...

The ODI said its study aims to take a “measured, empirical” approach to the environmental pros and cons of hydraulic fracturing, through which a mixture of water and chemicals is injected at high pressure to release pockets of natural gas.

It added: “The greater impediment is political, hinging on whether China has the political will and capacity to dramatically cap coal generation, invest in renewable energy, and enforce strong environmental regulations and targets.”

Fracking has stirred up strong passions, with opponents pointing to the sector’s reliance on water supplies in a country where supplies are scarce or severely polluted, while the use of chemicals and heightened regularity of earthquakes in drilling zones are also cited as major reasons why fracking should be tightly controlled or banned outright.

The ODI report says that the environmental impacts of fracking, while manageable, will need to be controlled much more rigorously than has been the case so far in other industries in China.

But it adds that some unavoidable pollution might be a price worth paying if shale gas displaces highly polluting coal and helps curb toxic air in China’s cities.

Coal is also the major cause of man-made climate change and China has undertaken to cap consumption of the fuel as it aims to peak its greenhouse gas emissions by 2030.

China is estimated to have the world’s largest shale reserves, which could help to supply new gas-fired power plants that would replace coal-burning capacity and provide back-up to intermittent supplies of wind and solar.

But China’s shale gas may not be economical unless the government helps fund a massive network of pipelines that transport unconventional gas from remote regions to areas of high demand.

Meanwhile, energy market reform may be needed to cover some of the high capital costs involved in getting unconventional gas out of the ground in China, owing to geology that is more challenging than the U.S.

The lack of a competitive business environment, a mature legal system, and private land ownership are also holding back China’s shale revolution.

Miners of Huaibei

By Xie Zhengyi
  • From left, Zhang Yixian, 51, Ren Gongming, 50, Wen Bianyu, 46. Together, they have a cumulative 71 years of experience working in the mines.
    From left, Zhang Yixian, 51, Ren Gongming, 50, Wen Bianyu, 46. Together, they have a cumulative 71 years of experience working in the mines.
  • Li Hongqi, 51, Wang Binjun, 42, Wang Xianjun, 48. Together, they have a cumulative 76 years of experience working in the mines.
    Li Hongqi, 51, Wang Binjun, 42, Wang Xianjun, 48. Together, they have a cumulative 76 years of experience working in the mines.
  • Li Chuanyi, 34, Li Guijie, 38, Zhang Yixian, 51. Together, they have a cumulative 52 years of experience working in the mines.
    Li Chuanyi, 34, Li Guijie, 38, Zhang Yixian, 51. Together, they have a cumulative 52 years of experience working in the mines.
  • Sun Qinshan, 34, Yin Guoshi, 46, Xie Haifeng, 47. Together, they have a cumulative 49 years of experience working in the mines.
    Sun Qinshan, 34, Yin Guoshi, 46, Xie Haifeng, 47. Together, they have a cumulative 49 years of experience working in the mines.
  • Jiang Xingren, 45, Pang Huaibei, 35, Yin Yonghua, 47. Together, they have a cumulative 55 years of experience working in the mines.
    Jiang Xingren, 45, Pang Huaibei, 35, Yin Yonghua, 47. Together, they have a cumulative 55 years of experience working in the mines.
  • Wang Jun, 49, Zhu Baowen, 43, Wang Shoulong, 52. Together, they have a cumulative 71 years of experience working in the mines.
    Wang Jun, 49, Zhu Baowen, 43, Wang Shoulong, 52. Together, they have a cumulative 71 years of experience working in the mines.

Water Stress

Moreover, the sector’s reliance on water, which is becoming increasingly scarce in many parts of China, would make the practice even more expensive, according to some analysts.

In China, 61% of shale resources are located in regions with high water stress or arid conditions, meaning that much of the country’s deposits of unconventional gas are unlikely to be recovered, said the World Resources Institute in a recent report.

The ODI says the biggest risk is that fracking contaminates the water table, and that the costs of treating and management of water could increase the temptation to discharge it in surface waters or underground.

However, it added: “Water demands are typically modest compared with total resource availability at national, regional, and even basin levels and are comparable with the demands of other industries, including coal.”

China’s water action plan, published last week, outlined a series of targets to improve dire water quality in China, and tougher penalties for industries responsible for polluting rivers, lakes, coasts, and groundwater, but the key to its success will be to make local officials accountable, say experts on China's water.