As recently as 2007, the United States seemed headed towards ever greater fossil fuel import dependence, as domestic oil and natural gas production dwindled and consumption continued to grow. Five years later, the landscape looks dramatically different. An explosion in natural gas production from shales has overturned paradigms and sparked bold talk of LNG exports. While less remarked-upon, unconventional oil production has followed suit, helping to boost liquids output 20% from 50-year lows and vaulting North Dakota ahead of Alaska to become the nation’s second-largest oil producer. A new order is emerging in the coal market as well, with efforts underway to ship cheap, low-sulfur coal from the western U.S. to China.
The new role for the U.S. as a hotbed of production and technology development for unconventional resources, a reduced import market, and a possible key exporter of natural gas and coal raises a host of political, economic, and environmental questions. The goal of this conference is to contribute to insightful and data-driven dialogue on these pressing (and often politically-charged) issues by bringing together academics, policymakers, industry experts, and other stakeholder groups.
Session topics will include: (1) the environmental and economic impacts of proposed exports of Powder River Basin coal to China; (2) which will happen first: major LNG exports from the U.S. or shale gas development at scale outside of the U.S. (and especially in China); (3) the changing role of the U.S. in the global oil market, and its geopolitical and economic implications; (4) the cases for and against pipelines connecting Canada’s oil sands with U.S. refineries; and (5) the trajectory of future natural gas demand from the U.S. transportation and power sectors.
Each session will feature a presentation by an academic or industry expert summarizing the state of knowledge on the topic and pointing out major unresolved issues. Discussants from the policymaking and stakeholder communities will then provide their perspectives on the presentation. This will be followed by an opportunity for audience comment and discussion.
Bechtel Conference Center
In recent years, natural gas prices in the United States have gone from historic highs of over $12 per mmBtu in the summer of 2008, to under $2.50/mmBtu in 2012. While demand side factors – such as the crisis in global financial markets – were partially to blame, many would argue that the real story is on the supply side, where increased production of shale gas – a form of unconventional natural gas trapped in leafy shale rock – drove gas prices down across the continent. The impact of low gas prices was felt in the form of cheap electricity, heating, and feedstocks to consumers and industry, which in turn bolstered the economic recovery. As an added bonus, cheap gas displaced dirty coal in power generation, reducing carbon emissions and pollution.
It is no wonder then, that when a recent U.S. Energy Information Administration publication on world wide reserves of shale gas crowned China as the holder of the world’s largest shale gas reserves, many inside and outside the Middle Kingdom were intrigued and enthralled by the possibilities of what shale gas could mean for China – in terms of climate, pollution, quality of life – and what it could mean for the broader international gas trade.
In this upcoming EWG talk, we will highlight some of the current activities and future plans for unconventional gas development in China. We will focus on the political, institutional, and commercial forces at play, and discuss some of the potential upsides and pitfalls that China will encounter on the road to realizing its unconventional gas potential.
Stanford University
In advance of the Pacific Energy Summit that will take place in Hanoi, Vietnam on March 20-22, PESD associate director Mark Thurber spoke with Jacqueline Koch of the National Bureau of Asian Research about the pivotal role of coal in Asia’s power generation mix and what “clean coal” means in the Asian context.
China possesses vast coal reserves, and coal accounts for 70 percent of the country’s total energy consumption—3 billion tons per year. But China also consumes oil, natural gas, and an increasing amount of renewable energy.
Xuteng Hu, a Corporate Affiliates Visiting Fellow Program alumnus (2007–08), manages energy and materials development projects at PetroChina’s Petrochemical Research Institute in Beijing, where he serves as vice president.
Hu received his master’s and doctorate degrees in chemical engineering from Tsinghua University.
PetroChina, one of China’s largest energy companies, has recently developed its own biojet fuel. The company is also researching other renewable energy technologies, including biofuel made from plant fiber.
During his year at Stanford University, Hu conducted research on the governance of China’s state-owned enterprises, focusing on energy companies like PetroChina, Sinopec, and China National Offshore Oil Corporation. He also studied strategies for the development and promotion of different forms of energy, ranging from coal to chemicals and oil to natural gas. Jean C. Oi, a political science professor and director of the Stanford China Program, served as Hu’s research advisor.
Since returning to China three years ago, Hu has managed the research and development of synthetic petroleum-based materials, and the construction of major pilot petrochemical plants. Perhaps most exciting of all, the biojet fuel project he led conducted a successful demonstration flight in October.
Of his time at Stanford, Hu says: “My experiences helped me think about corporate governance structure, energy development, and other issues related closely to my work from different perspectives, such as culture and society. It also enhanced my understanding of cultural and business exchanges between China and the West.”
China’s annual coal production, at 3.24 billion tonnes (Gt) in 2010, accounted for nearly half of the global total. In this comprehensive analysis of China’s coal value chain, Jianjun Tu examines the industrial organization and structure of China’s coal production, transport, and consumption. Tu’s study shines a light on one of the world’s largest and most complex energy markets and should be read by anyone with an interest in the future of coal, climate change, or global energy markets.
Key topics covered include:
Richard Morse was the featured speaker at the UT Energy Symposium on November 3rd. His talk, entitled, “Beyond Climate Policy: Reconciling Climate Change and the ‘Coal Renaissance’”, analyzed global coal markets and their relationship to climate change.
Because coal is the single largest source of global CO2 emissions, Morse argued that any attempt to combat climate change requires a strategy to address coal. Morse argued that existing climate policy frameworks are not accomplishing this at the scale required, and suggested new frameworks to address the coal and climate challenge that can be deployed in existing energy markets with limited government intervention and support.
University of Texas
Welch Hall 2.308
The International Energy Agency has released its flagship publication on global energy markets. PESD research directly contributed to a special section in this year’s outlook focusing on coal.
PESD Working Papers that helped inform the analysis include:
For more information: http://www.iea.org/weo/