China wants to step up the utilisation of shale gas. According to an article in China Daily, the National Energy Administration aims for annual shale gas output of 6.5 billion cubic meter by 2015. The administration has said the 12th Five-Year Plan (2011-15) will lay the foundations of large-scale production during the subsequent plan, when it aims for production of 100 billion cubic meter a year.

Ministry of Land and Resources data show that China has shale gas resources of 134 trillion cubic meters, of which 25 trillion cubic meters are recoverable, meaning that the country has surpassed theUnited States as the owner of the world’s biggest reserves of the unconventional gas. A study carried out by the US EIA estimates the technically recoverable shale gas resources even higher, to 1275 trillion cubic feet, equivalent to around 36 trillion cubic meters.

The use of natural gas in China is favorable from several viewpoints. Compared to the use of coal natural gas is cleaner, and both the local and the global environment will benefit from a substitution of coal based power production with a gas based. Exploration of the huge amount of shale gas will also reduce the dependence of imported fossil fuel in China.

But the use of natural gas in shale rock formations also has its flip-side. The gas is tied to the shale rock formations and the exploration requires special techniques. Here is what EIA writes about the exploration of shale gas in the US: “Hydraulic fracturing (commonly called “hydrofracking,” or “fracking,” or “fracing”) of shale rock formations is opening up large reserves of gas that were previously too expensive to develop. Hydrofracking involves pumping liquids under high pressure into a well to fracture the rock and allow gas to escape from tiny pockets in the rock. However, there are some potential environmental concerns that are also associated with the production of shale gas:

• The fracturing of wells requires large amounts of water. In some areas of the country, significant use of water for shale gas production may affect the availability of water for other uses, and can affect aquatic habitats.
• If mismanaged, hydraulic fracturing fluid — which may contain potentially hazardous chemicals — can be released by spills, leaks, faulty well construction, or other exposure pathways. Any such releases can contaminate surrounding areas.
• Hydrofracturing also produces large amounts of wastewater, which may contain dissolved chemicals and other contaminants that require treatment before disposal or reuse. Because of the quantities of water used and the complexities inherent in treating some of the wastewater components, treatment and disposal is an important and challenging issue.
• According to the United States Geological Survey, hydraulic fracturing “causes small earthquakes, but they are almost always too small to be a safety concern. In addition to natural gas, fracking fluids and formation waters are returned to the surface. These wastewaters are frequently disposed of by injection into deep wells. The injection of wastewater into the subsurface can cause earthquakes that are large enough to be felt and may cause damage.””

Considering the present and future difficulties with sufficient water supply and environmental protection in China it is necessary carefully to consider how the shale gas can be exploited in a sustainable way. Luckily it seams that Ministry of Land and Resources is aware of this. As Mr. Pan Jiping from ministry mentions to China Daily: “Survey and evaluation activity related to China’s shale gas reserves, which is still at the preliminary stage, is a key issue before China goes to commercial production”.
Pan adds that further technological breakthroughs and industry support policies are needed to draw companies into the sector and propel its growth.