Shale Gas: Not Made in China

While “Made in China” may be as ubiquitous a brand as Coca Cola, shale gas exports from China, at least for now, won’t measure up like toys and footwear. With possibly the planet’s largest amount of technically recoverable shale gas resources, China has been looking forward to making a name for itself in the shale gas business. In 2013 China ranked 3rd in natural gas usage in the world, with a whopping 166 billion cubic meters consumed. But it appears as if early attempts to reach their 2020 fuel goals have proved to be much harder than original estimates and now China is looking to recover from crazy, obviously unattainable initial goals.

Trouble Breaking the Barrier

When it comes to breaking ground, it seems that China’s government may have had eyes that were much bigger than their resources could handle. In 2012 China’s National Energy Administration set a very large goal of pumping somewhere between 60 to 80 billion cubic meters (bcm) of shale gas by the year 2020. Disappointingly for them, after more than four years of evaluations and drilling, China was able to uncover only one big find. This has left government officials scrambling to save face and still hold on to their overseas import deals.

Apparently the issue is largely due to complicated geology and rising production costs. This means the government is now being much more thoughtful and cutting the original outlandish goal in half. With the majority of projects in the country still in early exploration stages, this reevaluation finally seems like the first smart move they have made. Recently one government source fessed up that the earlier projections were “…more of a vague prospect, a hope.”

Chinese Government Now Scrambling for Guidance

In order to meet their current goal China is still very likely to have to rely on imports, which is good news for America. This means they will be looking to the US, and Texas in particular to relieve some of the pressure. In exchange for the tools and technology behind the American production success, many Chinese oil companies are offering firms a larger stake in the project than ever before.

The new projections are somewhat of a disappointment for firms that were looking to cash in on the drilling process early on. But if these firms are willing to hold out a bit of hope on the Chinese government’s willingness to save face, there is still plenty of money to be made in this endeavor. With the careful help and guidance of these US firms, China may be able to finally speed up production and get that much closer to their new and seemingly more attainable goal.
At Worldwide Power Products, though, we are already seeing somewhat of an uptick of interest in quotes for oil and gas engines and generators to China. While indeed not a boon yet, its a start.