Resolve to shift to clean fuel must not waver

Editor’s note: The government’s plan to use gas, instead of coal, for public heating in North China to reduce air pollution has caused a shortage in natural gas supply in northern cities, leaving thousands of residents shivering in the winter. This has sparked a debate on the unprecedented campaign to replace coal with gas as well as on what China’s future energy policies should be. Three experts share their views on the issue with China Daily’s Yao Yuxin. Excerpts follow:

Gas shortage is just a short-term problem Lin Boqiang, head of the China Institute for Energy Policy Studies at Xiamen University

The shift from coal to gas for heating is a natural consequence of China’s graduation from a lowincome to a middle-income country. The rising public call for clean air has prompted the government to expedite the pace of this shift, leading to a shortage of natural gas this winter.

But that doesn’t mean the government should slow the campaign, which is aimed at better protecting the environment while transforming the economic structure. Of course, the government should control the pace of this ambitious shift to meet the change in demands, so as to not cause inconvenience to people. For example, the government should allow residents to burn coal for heating when gas is not available.

Given that gas makes up only 7 percent of the country’s total fuel mix — compared with over 20 percent on average in developed countries — China is still far away from achieving the required standard gas consumption level to ensure blue skies. As such, the shift from coal is just the start of the energy reform in China.

Thanks to the oversupply of gas in the last few years, the energy enterprises were skeptical of the government’s decision to raise China’s gas consumption to 15 percent of the total fuel consumption in one stroke, which ended up creating the “gas crisis”. But since natural gas is abundantly available in the international market, the government and energy companies can sooner than later resolve the “gas crisis” through better coordination and a mature pricing mechanism.

Third party in industry can solve problem Han Xiaoping, chief information officer of China Energy Net

Energy companies pursuing profits prefer to sell natural gas to big enterprises rather than for civilian use, because the government strictly controls the price in the latter case. The price of gas has skyrocketed because of the gas shortage and the uninterrupted gas supply to industrial units. Administrative intervention will not only help divert the gas supply to heating stations to give residents respite from the cold, but also protect the energy enterprises from being penalized for breaching their business contracts with the industrial units.

The root cause of the gas shortage is the monopoly market run by China’s large energy companies. They refuse to build more underground facilities to store natural gas, citing unfavorable geographical conditions, high costs or non-profitability of building such structures. In fact, China’s underground gas storage facilities are few compared with the world average, which help other countries to meet the peak energy demands.

A more open gas market is the answer to China’s gas shortage, and third parties should be introduced to the energy industry as part of the reform. Natural gas is not a scarce commodity, so easing access to and encouraging investment from different sources in the energy market will help solve the public heating problem.

Good time to switch from coal to gas

As a country that has relatively low natural gas reserve, China mostly depends on imports to meet the market demand. Apart from using ocean-liners, China also imports natural gas through cross-border pipelines — mainly the west route from Central

Ma Xiaojun, a researcher at the Institute for International Strategic Studies of the Central Party School of the Communist Party of China

Asian countries, the north route from Russia, and the southeast route — to meet its demand.

To ensure energy security, China has been building its storage capacity. There is a shortage of gas partly because China does not have enough gas storage facilities, many of which are still under construction. However, geopolitical threats shouldn’t be a big cause for concern, because the relationship between buyers and sellers today is one of mutual dependence and quite stable.

This is a good time for China to accelerate its switch to clean fuel to better protect the environment, because the international market boasts adequate supply of natural gas for a reasonable price and, more importantly, because China is leading the global march toward clean energy, by aggressively generating solar and wind power to diversify its energy consumption mix.