China has a chance of challenging the United States for shale supremacy. So far, only the United States has significantly exploited domestic reserves of shale gas.
But China's state oil major Sinopec is now taking shale seriously, and lacks many of the roadblocks that have held developers in other countries back.
Many nations have energy trapped in their rocks, but shale gas extraction, born in the U.S.A., has all but stayed there. France moved to ban hydraulic fracturing, the controversial drilling technique used to extract energy from shale, earlier this year.
In Europe, mineral rights often belong to the government, making it harder for landowners to profit from shale development and thus hardening public opposition. Only in Poland is much progress being made.
China, however, may be best suited to shale. In New York and New Jersey, authorities have halted drilling in response to public unease, at least temporarily. Such trifles are unlikely to stand in the way in a country where over 1.2 million people were moved to make way for the Three Gorges Dam.
There's good reason to develop shale, too. Some 71 per cent of China's power comes from coal, creating an acute need for lower-carbon sources of energy.
And while the low price of natural gas may slow U.S. drilling over the coming year, China's state oil companies have proved willing to operate at a loss to ensure domestic supply.
True, China's emerging enthusiasm for domestic shale may be partly a hardball negotiating tactic with Russian suppliers, with whom the country has been struggling to agree a price for gas imports.
Moreover, geology is an unknown. While China may have about 50 per cent more shale gas than the United States, according to the Energy Information Administration, it has yet to uncover formations like the Marcellus or Eagle Ford.
But don't count China out: in the shale race, abundant capital, determination and political will go a long way.Report Typo/Error
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