The Chinese government is expected to hold its second-ever auction of shale gas drilling rights this summer in a sign of official interest in a fuel that has revolutionized the American energy landscape.
But despite extensive Chinese shale gas deposits — China’s technically recoverable resource base is estimated at 1,275 trillion cubic feet, according to the U.S. Energy Department’s Energy Information Administration, compared with an estimated 862 trillion cubic feet equivalent for the United States — it seems unlikely that China’s shale gas industry will take off anytime soon.
“The current situation is that in fact, there’s much more talk than action,” said Wenran Jiang, a senior fellow at the Asia Pacific Foundation of Canada and a founding director of the University of Alberta’s China Institute. There is “a lot of talk, a lot of enthusiasm,” Jiang added, “but a lot of people realize it’s not that easy” to transplant the American experience across the Pacific.
First off, while China appears to have abundant natural gas resources locked away in shale formations, the geology there is generally agreed to be much more challenging than in the United States.
Domestically, advances in hydraulic fracturing and horizontal drilling have allowed companies to access natural gas that had previously eluded capture. But Chinese shale formations are much deeper than American ones, experts say, and other geological differences suggest that getting to the gas will be more challenging. “The rock formations might be a lot harder, the resources a lot deeper, than in North America,” Jiang said, meaning that more chemicals will be needed to fracture the rock and that complex technical issues can be expected.
Industry observers say that even in the simplest of cases, hydraulic fracturing, or fracking, technologies are not straightforward to transplant.
“The reality is that even if Chinese companies have the technologies, using those technologies to tap into shale gas resources in China is going to be very, very difficult,” said Bo Kong, research director for the East Asian Energy and Environment program at Johns Hopkins University’s School of Advanced International Studies. “You have to have the techniques, you have to have years of experience, you have to have know-how to apply the technologies,” he added.
Noting that the recent U.S. success at shale gas extraction is rooted in a series of technologies that have been around for years, Kong said China’s shale gas story is likely to unfold over the medium to long term.
“Of course now it’s a big story [in the United States] because of the magnitude of volumes of production, but everything was in the works for the past two decades,” Kong said.