China can 'learn from US on shale gas'

The success of the shale gas "revolution" in the United States can be copied in other countries, including China, but the difficulties will determine how soon that can be achieved, said experts from around the world.

Government officials, industrial experts and businesspeople from the US and China discussed China's shale gas development on Saturday at the Boao Forum for Asia Annual Conference 2013.

"It is positive that countries such as Australia and China, which have rich shale gas resources, can copy shale gas development in North America, and the problem lies with how soon it can be achieved," said Robert Hormats, undersecretary of economic growth, energy, and the environment at the US State Department.

Hormats said the major deciding factors for the success of US shale gas are not only the availability of resources, but also mature gas pipeline construction, correct supervision and rich data.

The United States is the world's largest shale gas producer. In 2000, its produced 19.6 billion cubic meters of shale gas, and its output has seen an annual growth rate of 47.7 percent to reach 137.8 billion cu m in 2010, according to the US Energy Information Administration.

The EIA said China has total shale gas reserves of about 36 trillion cu m that can be explored, but Chinese industrial insiders said it is not that easy for the country to take advantage of these resources for several reasons.

The geological conditions of shale gas resources in China are very different from those in the US, which makes China's exploration activities difficult, said Gao Zimin, president of Shenzhen Energy Group Co Ltd, during the forum.

The complex geological conditions and the shortage of water resources are two major obstacles for shale gas exploration in China, he said.

"We have put a lot of emphasis on China's shale gas industry, but it is not a simple process of copying," he said. "We welcome foreign investors to cooperate with us in shale gas exploration."

Margaret Ren, country executive and chairman of Bank of America Merrill Lynch China, said technology revolutionized the US shale gas industry and made large-scale commercial production possible.

"We see obvious opportunities for China Inc to acquire advanced technology through both mergers and acquisitions and internal research and development over the coming years," she said.

"Many foreign companies also have a substantial interest in shale gas deposits in China, and have formed joint study agreements with their Chinese peers to explore shale reserves in the country."

Ren said that economic growth continues to drive China's need for energy and that shale gas has the potential to help the country's energy industry to be less reliant on imported gas.

Some domestic experts believe the country's shale gas industry has a long way to go, and there are better options.

China should make greater efforts with coal-bed methane exploration, which is more efficient and profitable than shale gas, said Zhang Guobao, former director of the National Energy Administration under the National Development and Reform Commission.