CHINA-ECONOMY: OIL & GAS

On January 26, the South China Morning Post publicised that Professor Zhang Yongming from the State Key Laboratory of Controlled Shock Waves at Xian Jiaotong University in Shaanxi province, had released details of a new “energy rod” that China is planning to use to access its massive shale gas reserves in Sichuan province. The technology is identical to that used to detonate a nuclear bomb over Hiroshima during the second world war. While success would mean a giant leap forward not only for the industry but also Beijing’s energy self-sufficiency ambitions, some observers are concerned about the potential risk of widespread drilling for the fuel in a region known for its devastating earthquakes. Despite having the largest reserves of shale gas on the planet – about 31.6 trillion cubic metres according to 2015 figures from the US Energy Information Administration, or twice as much as the United States and Australia combined – China is the world’s biggest importer of natural gas, with about 40 per cent of its annual requirement coming from overseas. In 2017, it produced just 6 billion cubic metres of shale gas, or about 6 per cent of its natural gas output for the whole year. Prof Zhang Yongming’s torpedo-shaped device uses a powerful electric current to generate concentrated, precisely controlled shock waves to achieve the same result. He told the South China Morning Post that while the technology had yet to be applied outside the laboratory, the first field test was set to take place in Sichuan in March or April, adding “We are about to see the result of a decade’s work."

(Comment: The problem is that 80 per cent of China's deposits are located more than 3,500 metres (11,500 feet) below sea level, which is far beyond the range of hydraulic fracturing, the standard method for extraction.)






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