The Chinese have a large air quality problem in their big cities, so they have announced that they will reduce their coal consumption share from its current 67 percent of consumption to 65 percent by 2017.  However, since their energy use is increasing, this announcement is unlikely to reduce total coal consumption, but its recent tremendous rate of growth will likely be slower. For example, over the past 4 years, China’s coal consumption increased by 35 percent.  But despite their announcement, don’t be fooled by this policy change because the country plans to use coal differently, which will result in even greater carbon dioxide emissions, not less.

China plans to move the use of coal outside of its large cities to produce synthetic gas and that gas will be used by power plants in the large cities. This policy will result in more carbon dioxide emissions released because converting coal to make synthetic gas and then combusting the gas to make electricity will be releasing carbon dioxide emissions twice.  China also realizes that the real pollution problem for its residents is not carbon dioxide emissions (that are a global issue), but emissions of  common pollutants (known in the U.S. as “criteria pollutants”) that are localized in the area where they are released.  China has plans to limit emissions of these pollutants but to levels that are still above current standards.

China and Its Pollution Problem

In January, the concentration of fine particulate matter, one of the criteria pollutants, in Beijing reached 40 times the exposure limit recommended by the World Health Organization.  According to the 2010 Global Burden of Disease Study, outdoor pollution accounted for 1.2 million premature deaths in China in 2010.[i]

Under China’s plan, concentrations of fine particulate matter must be reduced by 25 percent in the Beijing-Tianjian-Hebei area in the north, 20 percent in the Yangtze River Delta in the east and 15 percent in the Pearl River Delta in the south, compared with 2012 levels. In all other cities, levels of larger particulate matter, known as PM 10, must be reduced by 10 percent. Fine particulate matter, known as PM 2.5, is considered deadlier than PM 10 because it can penetrate deep into the lungs and enter the bloodstream. Beijing must also bring its average concentration of PM 2.5 down to 60 micrograms per cubic meter or less, which is two and a half times the recommended exposure limit set by the World Health Organization.

China’s plan also places modest limits on coal consumption, with coal to account for no more than 65 percent of total energy use in 2017, compared with 67 percent last year. For comparison, the U.S. relied upon coal for 18 percent of total energy use in 2012. For vehicle emissions, China ruled that all high-polluting “yellow label” vehicles that were registered before the end of 2005 must be removed from the roads by the end of 2015.

China’s Carbon Dioxide Emissions

China has been the world’s biggest emitter of carbon dioxide from fuel use since about 2006, when those levels surpassed that of the United States. According to the Energy Information Administration, in 2011, China’s carbon dioxide emissions from fossil fuels accounted for 27 percent of the global total, while the United States accounted for 17 percent. The International Energy Agency estimates that China’s emissions grew by an additional 3.8 percent in 2012.

One of China’s proposals is to limit coal burning by converting China’s coal into synthetic natural gas. China’s government has approved construction of nine large synthetic natural gas plants in northern and western China, which are estimated to generate 37.1 billion cubic meters of gas each year (1.31 trillion cubic feet) when completed. More than 30 additional proposed plants are awaiting approval. None of the planned plants are located near large Chinese cities, so the emissions generated in producing the gas will not affect those cities.[ii]

According to a study in Nature Climate Change by Duke professors, the entire life cycle of mining coal and turning it into gas produces from 36 percent to 82 percent more total greenhouse gas emissions than burning coal directly in pulverized coal-fired plants and twice as much if used instead of gasoline to run vehicles. The authors note that the carbon footprint for synthetic gas is about 7 times that of conventional natural gas. According to the authors, the 9 synfuel plants would emit 21 billion metric tons of carbon dioxide over a 40 year operating life compared to 3 billion metric tons for conventional natural gas over the same period. If all 40 synfuel plants are built, they would emit 110 billion metric tons of carbon dioxide over 40 years.[iii]

Further, according to the study authors, the regions where the synthetic natural gas plants are located are relatively dry areas, but converting coal to gas is a water-intensive process. It requires 50 to 100 times more water than producing natural gas from shale formations. Thus, China’s synfuel plan will increase water use and greenhouse gas emissions, and result in additional air and water pollution.

China Has Other Options

According to estimates from the Energy Information Administration, China has more shale gas resources than any other country in the world. China’s shale gas resources are estimated to total 1,115 trillion cubic feet, compared with 665 trillion cubic feet for the United States.[iv] However, China’s shale gas resources are yet to be developed. While the United States has an established shale gas production industry, especially on state and private lands, the Chinese have yet to develop its industry. Depending on the shale formation, its properties and the regulatory structure, technology may not be totally transferrable from country to country.

China also has plans to get natural gas from Russia and Turkmenistan. For example, China and Russia signed a memorandum of understanding in March where Russia will supply 38 billion cubic meters of gas to China annually beginning in 2018, eventually increasing to 60 billion cubic meters. According to the Chinese Ambassador to Russia, Li Hui, China’s investment in Russia increased from $740 million in 2012 to $2.23 billion in the first quarter of 2013.[v] Li also indicated that China would like to expand its investment in Russia and reach a target of expanding bilateral trade to $100 billion in 2015 and $200 billion in 2020.

China’s CNPC, the China National Petroleum Corporation, has a 20 percent stake in a liquefied natural gas project on the Yamal Peninsula in the Arctic, from which it is expected to import 3 million tons of gas annually.[vi] The Yamal LNG project is expected to have an annual capacity of 16.5 million tons based on the resources of the South-Tambeyskoye field. The proven and probable reserves of the South-Tambeyskoye field are appraised at 907 billion cubic meters of natural gas. [vii]

The following map shows the existing and planned pipelines of Russia’s Eastern Gas Program. Russia has plans to export gas to China at Blagoveshchensk and at Dalnerechensk. In May 2009, Russia’s Gazprom began building the Sakhalin-Khabarovsk-Vladivostok (SKV) gas transmission system as a key component of the Eastern Gas Program. The 1,830-km pipeline entered service in September 2011 at an initial capacity of 7 billion cubic meters per year, and is expandable to 47 billion cubic meters per year. Gazprom also has plans for a pipeline between Yakutia and a tie-in to SKV at Khabarovsk , which will be a 3,200-km pipeline that will parallel the Eastern Siberia-Pacific Ocean crude oil trunk line. It will enter service in late 2017 with an eventual capacity of 61 billion cubic meters per year.[viii]

Source: http://www.gazprom.com/f/posts/01/565246/map_vostok_eng.jpg

Conclusion

China continues to ensure adequate energy supplies to grow its economy in the future. It will continue to use coal at high levels, representing 65 percent of its energy consumption. But, it is also planning to supply itself with natural gas both from converting its domestic coal to syngas and getting it from other countries such as Russia. But, if it uses domestic coal and converts it to syngas, it will increase its carbon dioxide emissions and its water useage.  China needs energy to feeds its economic growth, and it is clear by their actions that they intend to get it.