Bloomberg View

Bloomberg View: How Shale Gas Can Save China From Itself


Cars in Beijing travel on the road in heavy smog on March 7

Photograph by ImagineChina/AP Photo

Cars in Beijing travel on the road in heavy smog on March 7

For years the Chinese have been told that the blinding, sooty haze choking Beijing and other cities is the price of progress. Yet China’s appetite for energy is literally killing its people. A study published in the Proceedings of the National Academy of Sciences, based on data compiled between 1980 and 2000, estimated that pollution caused by burning coal stripped five years from the life expectancy of Chinese in the northern half of the country—a collective loss of 2.5 billion years. A separate study published in December in the Lancet attributed about a million deaths a year in China to air pollution.

Although other factors have contributed to the blackening of China’s skies—including millions of cars and motorbikes clogging roads—coal remains the deadliest. In the past decade, China’s coal consumption has more than doubled. It now burns almost as much coal as the rest of the world combined. In the first three months of the year, levels of PM-10 (particulates with a diameter of 10 micrometers or less) in Beijing were almost 30 percent greater than during the same period a year earlier.

By contrast, in the U.S. CO2 emissions hit an 18-year low in 2012. The reason? An explosion in shale gas production raised the share of electricity produced by natural gas from 20 percent to 30 percent, while bringing down the proportion produced by coal from 50 percent to 37 percent.

China’s recoverable shale gas reserves are estimated to be 25 trillion cubic meters, 50 percent larger than those of the U.S. The government has already announced subsidies to local shale gas producers; it should also help finance new pipelines and gas-fired power plants. Officials must lower barriers to entry and increase incentives to encourage the most innovative drilling companies—the majority of which are American—to work in China.

Shale is no silver bullet. In the near term, China will have to keep building coal-fired plants to meet its voracious energy demand. Yet failure to address coal pollution will condemn millions more Chinese to premature deaths. It’s hardly a choice.

To read Jonathan Weil on S&P and Albert Hunt on who might manage a Hillary Clinton presidential bid, go to Bloomberg.com/view.


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