WATCHING THE WORLD: China relying on coal, CBM

Sept. 18, 2006
If you believe senior Chinese officials, their country’s future energy needs will be met more by domestic coal than by imported crude oil or natural gas.

If you believe senior Chinese officials, their country’s future energy needs will be met more by domestic coal than by imported crude oil or natural gas.

Indeed, at the 7th Sino-US Petroleum & Natural Gas Forum last week in Hangzhou, a senior official with China’s National Development and Reform Commission (NDRC) said his country would reduce its reliance on petroleum imports by basing its energy supply on coal and by developing new and renewable energy sources.

Zhang Guobao, vice-minister of the NDRC, said China successfully reduced its net imports of petroleum last year. He said China’s oil consumption was 317 million tonnes, down slightly from the previous year, and its net imports of petroleum came to 136 million tonnes, less than the total for 2004.

Oil imports normal

Zhang said China’s economy has maintained annual growth of over 10% for 3 years in a row, and therefore it is “normal” to see a rise in his country’s oil imports as well as its demand for energy.

Still, noted Zhang, China has been trying to reduce its reliance on imports of petroleum, and one way to do that is through increased use of coal.

According to NDRC, China’s coal output reached 2.22 billion tonnes last year, and coal supports 68.7% of China’s consumption of nonrenewable sources. By comparison, petroleum and gas support 24% of nonrenewable sources.

Complementing Zhang’s view, an executive with the China United Coalbed Methane Corp. Ltd. (CUCBM) said China will meet its rising demand for gas by making concerted efforts to develop coalbed methane.

Gas up, too

Fan Zhiqiang, director with the technological department of the CUCBM, China’s major CBM enterprise, said China plans to have its CBM output reach 10 billion cu m (bcm) in 2010 and will increase the country’s CBM proved reserves by 300 bcm.

He noted that China’s demand for gas has been met by imports since 2003, and he cited estimates that China will import 30 bcm of gas in 2010, with imports rising to 40 bcm by 2015.

To offset those figures, said Zhiqiang, China has been stepping up its investment in coal methane production. Last year, it invested $300 million in CBM exploration and completed the drilling of 607 wells with four blocks put into full operation.

Zhiqiang said China aims to establish a complete industrial system for CBM development and use, and nine transmission pipelines for CBM will be completed with a total length of 1,390 km and a designed transmission capacity of 5.73 bcm/year.

Even as the two men spoke, Chinese Vice-President Zeng Qinghong underscored the emerging policy with a visit to Shanxi Province, North China, Sept. 7-11, urging China’s largest coal production base to progress scientifically and to develop what he called “a new energy industry and coal-based chemical industry.”