Tapping into China's unconventional gas stores
Beijing has big plans to exploit its huge reserves of unconventional gas but major problems stand in the way
China, sitting on the world's largest undeveloped shale gas resource and the third-largest coal bed methane reserves, has outlined a bold five-year plan to replicate the United States' success in exploiting unconventional energy.
For a start, insufficient competition due to the industry's dominance by a few state firms, underinvestment in exploration and complex geology could hamper development. A low gas price, underdeveloped pipeline and storage infrastructure also add to the challenge. And then there's the scarcity of water and inadequate technology.
It all means Beijing needs to do more to improve the economics of such projects if it is to succeed in its plan.
The existence of shale gas and coal bed gas - natural gas trapped within sedimentary rocks and between coal seams - is formed in the process of the decay of organic materials over millions of years. Miners have known about it for many decades, but technological and economic barriers mean the resources have been largely untapped.
In the United States, technological innovation and huge investment led to coal bed gas output almost quadrupling in the past two decades, while shale gas production has quadrupled in the past four years alone.