Af­ter years of ‘com­plete mad­ness’, suc­cess springs forth

China Daily (Canada) - - PEOPLE - By AN­GUS MCNIECE an­gus@mail.chi­nadai­

Earth, wa­ter, air and fire — few per­sonal his­to­ries are as clearly de­fined by the clas­si­cal el­e­ments as that of Ran­deep Gre­wal.

An aero­nau­ti­cal engi­neer, a se­cond-gen­er­a­tion miner and the son of In­dia’s first fe­male pi­lot, Gre­wal has spent the past decades of his life ex­tract­ing coal bed meth­ane from be­neath the sub­sur­face of Cen­tral China.

His com­pany, Green Dragon Gas, is the largest in­de­pen­dent pro­ducer of the meth­ane in China and a key pro­tag­o­nist in the coun­try’s quest to di­ver­sify its en­ergy mix, from about 5 per­cent to 25 per­cent gas, which is more in line with de­vel­oped coun­tries.

Gre­wal’s pro­pri­etary drilling tech­nol­ogy does away with the chem­i­cals in­fa­mously as­so­ci­ated with frack­ing, so the wa­ter pro­duced when coal is de­pres­sur­ized is of suf­fi­cient qual­ity for ir­ri­ga­tion.

De­vel­op­ing this tech­nol­ogy was a long-term per­sonal pri­or­ity for Gre­wal, who spent his child­hood in ru­ral, drought­prone South­ern Africa.

“We said the only way to do this right is to keep it clean.

“I grew up in Africa with lit­tle wa­ter. We had to col­lect wa­ter from dirty streams, heat it and fil­ter it. I am wa­ter-sen­si­tive be­cause I grew up in that en­vi­ron­ment.” he said.

Cleaner air for China is an­other ob­vi­ous mo­ti­va­tion for Gre­wal. Hav­ing re­lied heav­ily on coal and oil dur­ing its in­dus­trial boom, China’s en­ergy mix has an ex­tremely low pro­por­tion of gas, which is by far the clean­est-burn­ing fos­sil fuel.

With strong sup­port from the govern­ment, the in­dus­try goal is to in­crease the pro­por­tion of gas in the en­ergy mix by 10 per­cent over the next four years. Res­i­den­tial cus­tomers and in­dus­trial play­ers are ex­pected to more than dou­ble their de­mand for gas by 2020, and do­mes­tic com­pa­nies like GDG are es­sen­tial to less­en­ing reliance on im­ported gas as de­mand in­creases.

The fact that GDG ex­ists and can ac­tu­ally per­form this role is im­pres­sive — out of the five com­pa­nies that en­tered China in the 1990s in search of coal bed meth­ane, Gre­wal’s is the only one that con­tin­ues to op­er­ate in the coun­try.

“It is not been an easy road,” Gre­wal said. “Last year was the first year of profit for our group in 20 years. It is com­plete mad­ness. A re­porter said to me re­cently, ‘You gave your youth to China’, and I did. I got there and I was a young chap with lots of black hair, and now I am an older chap with lots of white hair. But it has been a won­der­ful jour­ney.”

Gre­wal at­tributes much of his per­se­ver­ance to the “engi­neer nerd” in him. Ge­o­log­i­cally, China’s coal beds are among the world’s most chal­leng­ing for min­ers, but such prob­lems ex­cite Gre­wal. “The tech­ni­cal side has just been fun. The tech­ni­cal chal­lenge never re­ally frus­trated me.”

While some for­eign com­pa­nies have had trou­ble find­ing their bear­ings af­ter en­ter­ing a new mar­ket such as China, Gre­wal said his years liv­ing in the de­vel­op­ing world meant the ad­just­ment was rel­a­tively straight­for­ward.

“Peo­ple have al­ways quizzed me on how I got com­fort­able in China. My an­swer to them is the word sim­plic­ity. In China, I found the same sim­plic­ity I grew up with in the mid­dle of nowhere. Dad was scop­ing for min­er­als (in North­ern Rhode­sia, now Zam­bia), and the govern­ment was very keen for him to do so. So, it was a sim­ple plan that he was ex­e­cut­ing.”

In ad­di­tion to a sim­i­larly clear di­rec­tive — to help un­lock the many bil­lion cu­bic me­ters of gas trapped in coal beds be­neath Chi­nese soil — sta­bil­ity has been key to the suc­cess of GDG.

“I can say with com­fort that from the first day in the mid1990s, when we first started hav­ing con­ver­sa­tions about coal bed meth­ane in China, to to­day, it has been a con­sis­tent pol­icy. It was clear back then, and it is clear to­day.”

Gre­wal en­tered into pro­duc­tion shar­ing con­tracts with the govern­ment that granted sev­eral con­ces­sions to his com­pany.

In the early ’90s, as there was no in­fra­struc­ture to de­liver nat­u­ral gas to do­mes­tic con­sumers, China gave GDG the right to ex­port its prod­uct. For ev­ery cu­bic me­ter of gas the com­pany sells, the govern­ment pro­vides a cash sub­sidy, and what­ever China pays for im­ported oil and gas, that weighted av­er­age is trans­lated across to GDG from a pric­ing stand­point.

“It elim­i­nates the crys­tal ball ef­fect and the chance that you might wake up one morn­ing to a pol­icy that erodes your eco­nomics,” Gre­wal said.

“And in Jan­uary this year the govern­ment dou­bled that sub­sidy. There is no coun­try in the world … that has that de­gree of sta­bil­ity. Hence the suc­cess.”

So what, if any­thing, went wrong in the decades lead­ing to GDG’s first year of profit in 2015?

“Ev­ery­thing went wrong,” Gre­wal said, ex­plain­ing that Chi­nese coal beds are in­cred­i­bly com­plex, far deeper and more faulted than the norm.

“Ev­ery­thing that was avail­able in tech­nol­ogy did not work at all. And these are not les­sons you learned in days; you learned them in years.”

By 2003 ev­ery com­pany ex­cept GDG, in­clud­ing Tex­aco, Arco, Phillips and En­ron, had pulled out.

“The cor­po­ra­tions right­fully made good eco­nomic de­ci­sions at that time. They de­cided that the com­plex­ity of the ge­o­log­i­cal con­di­tions did not sup­port com­mer­cial­iza­tion of the re­source. We, on the other hand, were in­vest­ing our per­sonal cap­i­tal, so we were al­ready, in many re­gards, fully vested.

“It was a dif­fi­cult call. Frankly, at that point, it could have gone ei­ther way — ei­ther you take a com­plete write-off and exit, as the cor­po­ra­tions did, or you dig in and com­mit your­self to de­liver what you promised to de­liver. And we did.”

An ideal coal bed runs un­bro­ken in a hor­i­zon­tal seam be­low the sub­sur­face.

The beds GDG are min­ing are highly faulted, mean­ing sec­tions have shifted above or be­low one an­other.

Gre­wal’s min­ers have to run drill lines that snake up and down “like an eel swims through the wa­ter” to ac­cess the coal, be­fore meet­ing a ver­ti­cal well that re­leases the gas to the sur­face.

GDG has also de­vel­oped a way to mine with­out us­ing chem­i­cals. In drilling, air and wa­ter pres­sure are used to drive the drill bit. When rock is par­tic­u­larly tough, a sub­stance called drilling mud adds the vis­cos­ity the bit needs to carve its course.

Typ­i­cally, this sub­stance con­tains chem­i­cals that con­tam­i­nate the vast quan­ti­ties of wa­ter used, both in the drilling process and wa­ter re­leased by the coal, along with meth­ane gas, due to the change in pres­sure.

Cer­tain rocks hold the gas mol­e­cule so tightly that the use of chem­i­cals is un­avoid­able, but Gre­wal re­al­ized this is not the case in Chi­nese coal beds.

Start­ing in 2007, GDG be­gan us­ing a spe­cial biodegrad­able drilling mud that means farm­ers can use the wa­ter pro­duced by the com­pany’s mines.

“To­day I can proudly say we drill with air or clean wa­ter. We do not use an ounce of chem­i­cals. We pro­duce clean wa­ter from the coal, which is used by the lo­cal farm­ers for ir­ri­ga­tion pur­poses. Good clean wa­ter.

“And we have done this while en­joy­ing the com­fort of the cen­tral govern­ment poli­cies and long-term vi­sion to­ward coal bed meth­ane. We bought into that vi­sion on the day we got there, and the bet we took proved to be cor­rect.”

I got there (China) and I was a young chap with lots of black hair, and now I am an older chap with lots of white hair. But it has been a won­der­ful jour­ney.” aero­nau­ti­cal engi­neer

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