As an increasingly important energy source in China, natural gas needs to follow the rule of balance between supply and demand. But the supply of natural gas, mainly from western parts of the country, and the demand for natural gas, mainly from eastern parts, are not balanced; this created the background of the project “Transfer Gas from West to East.”
In 2003 China surpassed Japan to become the second largest energy consumer in the world after the United States. China’s consumption of natural gas has been increasing with amazing speed through the years. During the tenth Five-Year Plan (2000–2005), the annual consumption of natural gas was 13 percent of total energy consumption, and this number increased to 20 percent in the past two years. In response China launched the Transfer Gas from West to East Program (the Program) in 2002.
Supply and Demand
China’s supply of natural gas comes from west China. Some 77 percent of China’s natural gas is located in the Talimu Basin (which stores 22 percent of China’s total natural gas reserves), E’erduosi Basin, Sichuan Basin, Chaidamu Basin, Yingqiong Basin, and East Sea Basin. The first four basins mentioned store 60 percent of China’s total natural gas deposits.
The demand for natural gas, the other side of the energy story, comes largely from east China, in which the Yanzgi River delta stands out as an example; 85 percent of the energy used in the delta, including natural gas, comes from outside the area. Experts predict that natural gas consumption in the Yanzgi River delta will only continue to rise. The area consumed 4 billion cubic meters of natural gas in 2002 and 10 billion cubic meters in 2005 and is projected to use 20 billion cubic meters in 2010.
The economic law of supply and demand is the theoretical foundation of the Transfer of Gas from West to East Program. In addition, sending what is needed to areas of high demand will do more than provide a balance between supply and demand. It will also stimulate related industries, further activate the industrial base in the west, and reduce pollution. This program, therefore, is extremely important in one of China’s preeminent national strategies: the Great West Development Plan.
The Program’s Impact
The first phase of the Transfer of Gas from West to East Program involved building a 4,000-kilometer gas pipeline network stretching from the west to the east of China. The pipeline starts at the Talimu oilfields in Lunnan; continues through Xinjiang, Gansu, Ningxia, Shanxi, Shaanxi, Henan, Anhui, Jiangsu, Zhejiang, and Shanghai; and terminates in Baihe town in Shanghai. The pipeline is the first world-class pipeline designed by China. Construction began in February 2002, and the pipeline began to transport natural gas on 1 October 2004. It is estimated that the gas pipeline can transfer at least 12 billion cubic meters of natural gas per year.
The Program, however, undertakes more than setting a balance between gas supply in the west and gas demand in the east. The Program will help promote related industries—such as steel, cement, and machinery—which will form a new industrial growth belt. The pipeline project itself used 1.74 million tons of steel 5,100 tons of welding rods, and many air pumps and other hand tools and precision instruments, along with enormous amounts of water and timber. Some 67 percent of the gas pipeline runs through the west of China, which greatly stimulates local economies and connections between the west and the east. In Xinjiang, for example, the Program attracted more than 20 billion Chinese yuan in investments. The Xinjiang part of the Program also created large tax revenues for local governments and created employment opportunities for local peoples.
China’s energy consumption structure will be largely upgraded by the Program. Natural gas can be widely used not only for people’s daily needs but also for fueling industry by generating electricity. And compared to coal, natural gas is a much more environmentally friendly choice of fuel, especially in areas of rapid economic development. The development of the gas pipeline should actually help improve the environment.
Improving the Environment
Natural gas is much more effective than coal is in terms of thermal efficiency, cost, and negative impact on the environment. Coal is a heavily used source of energy in China, accounting for 72 percent of China’s total energy consumption. Although burning coal creates power, it also creates sulfur dioxide (SO2), nitrogen oxide (NOx), carbon dioxide (CO2), and dust, which are all harmful to the environment. China exceeds the United States in SO2 emissions, and is now Number 1 in the world. China ranks second in CO2 emissions, right behind the United States.
Twelve billion cubic meters of natural gas—the amount the pipeline can transfer annually—is equivalent to 9 million tons of coal. At these amounts, using natural gas instead of coal would eliminate 135,000 tons of SO2, 153,000 tons of NOx, and 270,000 tons waste-smoke emissions and dust from the environment. While producing the same amount of thermal efficiency, the ratio of dust emissions from burning coal to natural gas is 148:1; the ratio of SO2 emissions is 700:1; and the ratio of NOx emissions is 29:1. The ecosystem of east China is fragile and can no longer afford the pollution burden from burning coal. Moreover, Shanghai and Jiangsu suffer from a high frequency of acid rain.
In many ways it appears that utilizing natural gas from the west of China is an effective choice for minimizing environmental pollution without significantly sacrificing the country’s drive toward economic development.
The construction of the west-to-east natural gas pipeline is only the first stage of the Program. A planned project based on market forces is making a success of the Project Transfer of Gas from West to East, and this combination of markets and government planning is going to speed up both economic development and environmental protection in China. With the success from Project Transfer Gas from West to East, more similar projects started, to boost commodities exchange, smooth supply and demand and further apply the rules of market economy.
Further Reading
Chen Lixiang. (2006). Xi Qi Dong Song Yu Sheng Tai Ti Xi An Quan [Projects of Transfer of Gas from West to East and ecological system security]. Beijing: Science Publishing.
Chen Xiushan. (2006). Xi Bu Da Kai Fa Zhong De Ju Xing Xiang Mu [Mega projects in the Great West Development Plan]. Beijing: Renmin University.
Hou Jinwu. (2005). Xi Qi Dong Song Yu Di Zhi An Quan [Project of Transfer of Gas from West to East and geographic hazards]. Beijing: Dadi Publishing.
Hu Xin. (2005). Zhong Guo De Jing Ji Di Li [Economic geography in China]. Beijing: Lixin Accounting Agency.
Wang Junhao. (2002). Zhong Guo Long Duan Chan Pin De Ding Jia Ti Xi [The pricing system of monopoly products in China]. Beijing: China Economics Publishing.
Source: Zhou, Guanqi. (2009). Transfer Gas from West to East Program. In Linsun Cheng, et al. (Eds.), Berkshire Encyclopedia of China, pp. 2315–2316. Great Barrington, MA: Berkshire Publishing.
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