China scales back north­ern gas push to avert heat­ing cri­sis

The Myanmar Times - Weekend - - International Business -

BEI­JING scaled back its plan to con­vert north­ern cities to cleaner fuel this win­ter af­ter provinces warned of gas short­ages, res­i­dents strug­gled to keep warm and re­ports of freez­ing class­rooms deep­ened con­cerns about a heat­ing cri­sis.

The de­cel­er­a­tion is the first ad­mis­sion from the cen­tral gov­ern­ment that its ef­fort to switch house­holds and fac­to­ries in the coun­try’s smog­gi­est cities away from coal to gas or elec­tric heat­ing may have been im­ple­mented too quickly, and with­out the crit­i­cal in­fra­struc­ture and do­mes­tic out­put to meet the re­sult­ing surge in de­mand.

China’s Min­istry of En­vi­ron­ment has told north­ern re­gions that have not con­verted to gas or elec­tric heat­ing they may burn coal or other fu­els in­stead, fi­nan­cial magazine Caixin re­ported.

Caixin cited reg­u­la­tory sources who con­firmed to the pub­li­ca­tion that of­fi­cial or­ders were is­sued in a doc­u­ment.

“It is not wrong for Bei­jing to push the coal-to-gas switch, but the process was a bit too fast and out­paced the mar­ket’s ca­pac­ity,” said Xu Bo, a re­searcher with CNPC’S Re­search In­sti­tute of Eco­nomics and Tech­nol­ogy.

Sus­pend­ing the project that stretches across 28 north­ern cities may have a limited im­pact as more than 4 mil­lion homes have al­ready in­stalled gas-fired ra­di­a­tors, while tens of thou­sands of fac­to­ries have ripped out coal-fu­elled boil­ers.

The ex­tra con­sump­tion since the win­ter heat­ing sea­son started in midnovem­ber has al­ready trig­gered a surge in do­mes­tic gas prices to record highs and forced com­pa­nies to take un­prece­dented, costly steps to en­sure sup­plies.

Chi­nese LNG prices have surged over the past month, hit­ting record highs last week above 8,000 yuan ($1,210) per tonne, ac­cord­ing to mar­ket.yeslng.com, an un­reg­u­lated on­line ex­change for do­mes­tic sup­plies of the fuel.

The gov­ern­ment’s re­treat is a blow to a years-long push to wean China from coal, its favourite fuel, to help clear the na­tion’s smoggy skies, which have be­come a hot-but­ton is­sue.

Bei­jing is un­der in­creas­ing so­cial and eco­nomic pres­sure to deal with the chronic haz­ardous air that blan­kets the north and threat­ens peo­ple’s health. Re­sort­ing to coal For now, con­cerns about keep­ing the world’s most pop­u­lous na­tion from freez­ing have taken prece­dence.

In He­qiaox­i­ang, a vil­lage out­side of Baod­ing in He­bei prov­ince about 150 km south­west of the na­tion’s cap­i­tal, the project to con­vert homes to gas is run­ning be­hind sched­ule, with many res­i­dences still with­out new gas-fired boil­ers.

With tem­per­a­tures fall­ing well be­low zero Cel­sius at night, Me Li told Reuters on Thurs­day he has re­sorted to us­ing coal again and switched his old boil­ers back on. “I hate coal boil­ers, but I have no other choice,” he said, af­ter buy­ing four tonnes of coal from a friend.

“Oth­ers in the vil­lage are not so lucky. They don’t know where to buy coal and are liv­ing in the cold.”

On Thurs­day, the of­fi­cial English lan­guage news­pa­per China Daily said the Min­istry of Ed­u­ca­tion de­manded “im­me­di­ate” ac­tion to en­sure class­rooms are warm enough af­ter lo­cal me­dia re­ported stu­dents were show­ing symp­toms of frost­bite due to de­lays in heat­ing sup­plies in He­bei prov­ince.

Heat­ing to some ru­ral schools in He­bei’s Quyang county has been de­layed, forc­ing classes out­side into the sun’s warmth, the China Youth Daily re­ported.

Cities that have al­ready switched to gas should en­sure steady sup­plies and sta­ble prices of gas and elec­tric­ity, the en­vi­ron­ment min­istry said in its doc­u­ment, ac­cord­ing to Caixin.

Still, state oil and gas pro­ducer China Na­tional Petroleum Corp (CNPC) joined a cho­rus of warn­ings across the in­dus­try on Thurs­day warn­ing of short­ages if the win­ter is ex­tremely cold.

Wood Macken­zie es­ti­mates heat­ing needs alone will add 10 bil­lion cu­bic me­tres (bcm) to China’s gas de­mand, the equiv­a­lent of Viet­nam’s an­nual con­sump­tion. China is ex­pected to use a record of about 230 bcm this year.

“It will take time to im­prove the in­fra­struc­ture, so I think the gas short­age prob­lem in China will re­main in fu­ture years, but should not be as bad if we learn from the les­son,” said CNPC re­searcher Xu. – Reuters

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