China Announces Shale-Gas Subsidy
From Energy & Capital
By Swagato Chakravorty
The Chinese government has just announced a subsidy of 0.4 yuan ($0.06) per cubic meter for energy companies developing the country’s shale-gas resources.
The U.S. Energy Information Administration previously estimated that China may indeed have the world’s largest shale-gas reserves, but high startup and development costs have hindered real progress. This new move could jumpstart that.
Key blocks in China’s five-year plan that would normally command costs as high as 300 to 500 million yuan ($48 million to $80 million) could see production costs reduced by as much as 30 percent.
According to the U.S. EIA, China could have as much as 1,275 trillion cubic feet of technically recoverable shale gas, and the country has had its eye on fracking for quite some time. So far, the government has targeted 19 blocks as critical areas for exploration.
The government has a goal of producing 6.5 billion cubic meters of gas per year by 2015 and 60 billion to 100 billion cubic meters by 2020.
