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Page added on January 23, 2014

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China’s Coal to Gas Plans: Old Wine in New Bottles

Consumption


2014-01-19-ChinaAirPollution.jpglarge

The Chinese coal industry has a plan to solve the nations air pollution crisis — consume more coal. Last week the Chinese chief energy planning agency, the National Energy Administration (NEA) concluded its annual work session with a plan for for a whopping 50 billion m³ coal-to-gas (CTG) output target for 2020. According to the NEA, if the target is carried out, CTG could supply one-eighth of China’s gas consumption by the end of this decade. The problem is, in reality this just means more coal consumption — which means more catastrophic air pollution.

Throughout 2013, the Chinese government gave an unprecedented set of green lights to 15 CTG applications. To put that in context, a grand total of 4 approvals existed before last year. All these projects are expected to convert coal into synthetic natural gas (SNG) through various gasification processes. The reason? Coal industry advocates, want to solve the severe air pollution through the substitution of coal to gas. The problem of course is that this is the same old wine just in a new bottle.

Under the guise of “addressing air pollution” these plans will do nothing more than increase the problem — the consumption of coal. Ironically, it is exactly the same coal companies that contribute most to air pollution that are now selling the “silver bullet” of CTG as a solution to the problem they themselves create. As a matter of fact, CTG will neither stem China’s growing air pollution crisis, nor upgrade its energy infrastructure. Instead it will further lock China to its coal addiction – with a whole set of new environmental risks.

CTG entails significant carbon emissions, water consumption, as well as air and water pollution. If the 2020 CTG target is met, 12 billion tons of CO2 will be emitted over the 40 year timespan of these projects — close to two years of China’s total CO2 emissions.

The water impacts are potentially more concerning. China is already facing a coal and water crisis given the enormous water withdrawals the coal industry requires. According to one study, one cubic meter of SNG requires 6 to 10 liters of water to produce. The target will therefore exacerbate China’s water conflict by adding 300-500 million tons of water consumption yearly. Considering 77 percent of the approved capacity will operate in water stressed regions, this huge pipeline of CTG projects are simply unaffordable to China’s dry west.

In the long run the NEA’s plan could fundamentally re-shape the geographic layout of coal production and the growth trajectory of the whole sector. The target would imply coal consumption of about 160-180 million tonnes per year. This might not sound like a huge addition given China’s enormous appetite for coal, but consider that half of the CTG projects approved are located in Xinjiang, China’s far western autonomous region with abundant yet largely untouched coal reserves. The CTG target will certainly unleash a local coal development rush in an ecologically fragile place, where the current water consumption rate has already gone beyond the provincial water allocation cap. If left unchecked, the gradually declining consumption of coal in China’s eastern economic powerhouse will rapidly turn west. China will miss its opportunity to truly optimize its energy and economic structure and diversify away from coal.

The catastrophic air pollution China experienced in 2013 has proven China’s decades-old coal obsession is simply unsustainable. The result was a set of ambitious air pollution control plans to slash coal consumption. The coal industry seems set on rebranding its toxic product in “new bottles.” Failing to recognize it as such will only undermine China’s important steps to reign in this crisis.

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19 Comments on "China’s Coal to Gas Plans: Old Wine in New Bottles"

  1. Davy, Hermann, MO on Thu, 23rd Jan 2014 12:45 pm 

    Another Chinese mega project that will produce unintended consequences. Sounds great on paper. Clean Gas produced far off piped to far away cities. We know gas is not clean. It has its own set of emission problems. Coal to gas is incredibly dirty and water intensive as we all know. Sounds like Chinese coal industry hype like we see in the good old USofA fossil fuel industry. Seen any “clean coal commercials lately? From a climate standpoint this puts Keystone to shame!

    From the standpoint of we need the whole buffet of energy option to mitigate the dangerous peaking of coal and oil to our fragile global economic system. Peaking gas soon after. I am saying some of this may be needed in China from this point of view of all options must be undertaken. Yet, I cannot see how much can be produced considering the multitude of issues facing such an undertaking from vast pipeline systems to water diversion needed. China will soon be overwhelmed with projects it cannot afford nor maintain. In a world of financial crisis.

    Again folks, I hate the environmental destruction going on but the destruction very well could get worse if we have a significant contraction or collapse that is too rapid. We know it is likely coming but how fast and how severe is the issue. We need time for transition initiatives, local lifeboats, renewable buildups, and national mitigation plans to form. We are grossly underfunded so to speak in plan B’s. Your favorite project will not be feasible when a collapse gains steam. While we still have a functioning economic system we understand lets hope some plan B action coalesces. This may be wishful thinking but what little is happening still needs a couple of years. I personally need 5 more!

    OK, back to China and this coal fantasy. If you read Heinberg and his peak coal discussions you will understand china will soon be in dire straits because of above and below ground coal peaking issues. So this just “aint goin to happin”. China’s growth paradigm has run its course. The Chinese may have a right to a 1st world living but at the cost of the world environment? I personally think the old world Chinese agrarian society has much more to offer than the grossly polluted and unequal society you see today

  2. Northwest Resident on Thu, 23rd Jan 2014 3:38 pm 

    If anybody could point me to some good news coming out of China these days, I would really appreciate it. All I can find is BAD news — elites fleeing the country and putting their skimmed-off billions in offshore accounts, air and water and soil pollution on scales that peg the toxicity meter, financial fraud and unaccounted-for trillion$ combined with looming defaults. I look at China and I think Oh My God, what has unrestrained and unregulated Capitalism done to that once great country. China has transformed itself into a cesspool of greed, corruption and toxic waste. But hey, what the heck, we made a few bucks on the deal so what’s the problem?

  3. J-Gav on Thu, 23rd Jan 2014 3:55 pm 

    Maybe they could make some big bucks to pay for clean-up by giving tourists special deals to come and choke in their major cities: “Come one, come all, get real-life experience in what it means to put the industrial cart before the environmental horse.”

  4. Northwest Resident on Thu, 23rd Jan 2014 4:19 pm 

    J-Gav: Most excellent sarcasm, dude! Or along those lines, how about this — China makes a deal with North Korea where, instead of North Korea sending its people to concentration camps to be tortured, starved and worked to death, they send them to China to work on the pollution cleanup chain gangs, free of charge. China gets environmental clean-up, North Korea gets the benefit of having their people tortured, starved and worked to death while engaged in a worthy pursuit. It is a win-win.

  5. Davy, Hermann, MO on Thu, 23rd Jan 2014 6:04 pm 

    You have a sick mind NR:) Joking…or am I…anyway China will be the worlds undoing because they will lead the charge over the cliff like Thelma and Louise. Don’t get me wrong in all do respect to fairness shouldn’t they get a change at destructive dangerous unrestrained growth? Like the developed world had in 19th and 20th century. Or…should we as a global people say enough and put pressure on them to change. Even if we have a financial crisis leading to depression era economic activity the sheer size of China and its industry will smash any attempts to reduce climate change and global pollution.

  6. Northwest Resident on Thu, 23rd Jan 2014 6:27 pm 

    What I really think, based on no direct evidence whatsoever, is that TPTB saw the problems with oil/energy shortages looming on the distant horizon twenty or so years ago. To keep the economy ramped up, in an effort to buy time needed to make their own preparations, they moved a huge amount of American production to China where the cost of production dropped significantly due to no environmental safety laws and zero regulations. The deal they made was with the Chinese elite — hey, let us nuke your country to keep BAU going while we prepare for the end of the world, you get rich and get to join us in our hardened survival silos, otherwise die along with the rest of your population. Take it or leave it. From the looks of it, the Chinese Elite made their deal with the devil, and here we are.

  7. pwallmann on Thu, 23rd Jan 2014 8:24 pm 

    For clarity sake, NR are you saying that non-polluting (relatively speaking) China in the 50’s is “better” for humanity then the China of today? Or was that first post sarcastic?

  8. PrestonSturges on Thu, 23rd Jan 2014 8:24 pm 

    >>> If you read Heinberg and his peak coal discussions you will understand china will soon be in dire straits because of above and below ground coal peaking issues.

    That’s my take since America’s “400 years of coal” seems to equal 25 years of coal. We can only level the Appalachias once. How much actual coal does China have? 10 years worth? Their current problems aren’t going to be any better when they are reduced to burning lignite!

  9. Northwest Resident on Thu, 23rd Jan 2014 8:36 pm 

    pwallmann — My first post was not sarcastic, and I definitely wasn’t trying to say that China as it existed in the 50’s was better for humanity than the China of today, or even thinking along those lines. If that was a yes/no question on a test, it would be very difficult for me at least to make a determination of which “version” of China is or would be better for humanity — they both come with extreme negatives and a few positives, IMO. But if you ask me, which version of China was better for the Chinese people, which is what I was thinking about, I would go with the 50’s version. Or, alternatively, if you were to ask me which version of China is better for the Chinese Elite, then I would go with today’s version — they are getting rich, sticking the $$$ in offshore accounts and bailing out of their homeland, leaving the peasants and non-elites to deal with the smoking, toxic and soon-to-crash homeland.

  10. pwallmann on Thu, 23rd Jan 2014 8:59 pm 

    Just trying to get passed the usual semantic issues so we’re talking about the same thing. 50’s China was better for Chinese people? I suppose that I was particularly referring to late 50’s into the early 60’s with the Great Leap Forward.

    I certainly agree that the problems you point out are real. But with the amount of wealth generated in that country in the past few decades, there should be some fabulously rich people. But the drop in absolute poverty is staggering.

    (http://www.google.ca/publicdata/explore?ds=kthk374hkr6tr_#!ctype=l&strail=false&bcs=d&nselm=h&met_y=indicator_38906&scale_y=lin&ind_y=false&rdim=country&idim=country:4103&ifdim=country&hl=en_US&dl=en_US&ind=false).

    That’s above 60% of the population living on less then $1.25/day to less then 15%.

    Mao’s Great Leap killed, north of what 30 million? I don’t know. Again, “better” is a subjective term. I think the reduction in absolute poverty (to say nothing of the famine of the 50s-60s, and Mao’s tyrannical rule) outweighs the negatives you outline.

    Agree to disagree?

  11. Northwest Resident on Thu, 23rd Jan 2014 9:19 pm 

    pwallmann — Perhaps I should amend my “Chinese people were better off in the 50’s” assessment to “The Chinese people who didn’t get caught up in the murderous events collectively referred to as Mao’s Great Leap Forward were ‘better off’ — as in, the worst day above ground is better than the best day underground…).

    All joking aside, I see exactly what you mean. Maybe we shouldn’t be asking at what point was China better off, but at what point was China less “totally and irrevocably screwed?” The Elite, as always — that being the Communist Party honchos in China — do just fine in either case. And that’s the way it goes.

  12. PrestonSturges on Thu, 23rd Jan 2014 9:48 pm 

    The Great Leap Forward included widespread cannibalism. It’s not clear that it was 100% motivated by hunger either – some of it seems to have been political or ritual. Students tortured and killed their teachers. Children turned in their parents. It all meant absolutely nothing, the nation went mad.

  13. Northwest Resident on Thu, 23rd Jan 2014 9:57 pm 

    I hope that DU — the number one America-hater who regularly posts on peakoil — will stop by and read the comments on this article. Judging by DU’s posts, “ameriKa” and “ameriKans” are the source of all evil in the world today. No doubt, we have our faults, and our history and our present is stained with innocent blood. But how do our worst deeds compare to acts like the Great Leap Forward, the Rape of Shanghai, the Stalin purges, and so many other savage atrocities committed by other nations? But don’t get me going on that again…

  14. J-Gav on Thu, 23rd Jan 2014 10:38 pm 

    NW – Thanks. I call it irony, not sarcasm, but whatever you call it, it’s lost on most people, so I’m glad you understood. China’s got some major financial/banking “corrections” to go through, just like the western world. How they come out of it is anybody’s guess right now but it isn’t likely to be a picnic.

  15. PrestonSturges on Thu, 23rd Jan 2014 11:17 pm 

    Gee where’s the usual China cheerleaders telling us about the impending Chinese hegemony?

  16. Makati1 on Fri, 24th Jan 2014 1:12 am 

    Back and forth, but you all could be describing the US instead of China. It is the US that is currently destroying the world, not China or any other country.

  17. Davy, Hermann, MO on Fri, 24th Jan 2014 11:21 am 

    Makati1 get with the program. Graduate from the 20th century into the brave new world of the 21st century. American bashing is blazay.

  18. simonr on Fri, 24th Jan 2014 1:21 pm 

    Davy,
    to be fair having read many posts here, all the worlds problems are the fault of

    Amerikans (not sure but I assume thats the USA)
    Zionist/The Jews (apparently they are everywhere … who would have known)
    ‘The West’, I not sure who the west are, but it is most definately their fault

    I may have missed a few out, but I think these three will do for a start

  19. Northwest Resident on Fri, 24th Jan 2014 3:22 pm 

    With all due respect, Makati1, I think you’re wrong when you say that “the US is currently destroying the world.” The global financial forces of greed, pillage and plunder are the ones doing that. There are no doubt many American financial elites — corporations and individuals — who are part of that global financial force, but there are many others from different nations too. Remember, we have “the 1%” in America — the “99%” have NOTHING to do with the global environmental and financial destruction going on — we’re all just sheep being lead to the slaughter by that 1% and their global counterparts.

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