China takes step towards tapping shale gas potential with first well

Drilling in Sichuan deemed a success as China seeks to emulate US's adoption of costly and controversial technique

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Drilling for shale gas will be particularly costly in China due to the country's water shortage. Photograph: Stringer/Reuters

China has begun trials of a controversial drilling technique to exploit the world's largest reserves of shale gas, as it attempts to cope with the increasing energy demands of a fast-growing economy while reducing its dependence on coal.



"Shale gas is a game-changer for the US and should do the same for China," said Ming Sung, Asia representative of the Boston-based Clean Air Task Force and an advocate of closer energy links between the two nations. "This should be one of the centre-pieces for China's energy strategy. As with any new technology development, we must balance benefits versus potential environmental impacts. The experiences of the US are valuable here."

The extraction method itself is costly, controversial and challenging. Hydraulic fracturing or "fracking" involves the injection of chemically treated water at high pressure through seams of rock, forcing the gas inside to seep out to where it can be captured. Environmentalists warn that this wastes and contaminates millions of tons of water.

For fuel-hungry, drought-plagued China, this poses a conundrum. The energy potential is enormous. The ministry of land and resources calculates the size of shale gas reserves at 26tn cubic metres – more than 10 times the country's known holdings of conventional natural gas.





"The success of this well is valuable for the future of horizontal shale gas technology," said an industry source. "We expect to reach our targets for exploration and development ahead of schedule."


In an effort to wean the economy off coal, China plans to triple the use of natural gas so that it supplies 10% of the country's energy needs by 2020. Most of this will come from conventional wells and coal-bed methane, but the share from shale is in fact likely to hit 12% by 2020 and continue rising.




But experts and industry executives downplayed the prospect of China exploiting shale gas reserves as quickly as the United States because the geology of the two nations is different. They said China's shale is older and, tonne for tonne, produces less than half the gas of shale in the US. Water shortages will add to the costs. One of China's two biggest deposits in the country – the Turpan Basin in Xinjiang – is a desert.

In the short term, Liang said the costs were likely to curtail China's shale gas ambitions.


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