Greenpeace accuses Shenhua of 'drastic' groundwater drop

Report accuses Shenhua Group, the nation's largest coal producer, of draining 50 million tonnes of groundwater from water-scarce region

PUBLISHED : Wednesday, 24 July, 2013, 12:00am
UPDATED : Wednesday, 24 July, 2013, 5:19am

Environmental group Greenpeace yesterday fired its first open challenge to a powerful state-owned firm, accusing the nation's largest coal producer of causing "drastic drops" in groundwater near one of its projects and of illegally discharging toxic wastewater.

A Greenpeace report said that a coal-to-liquid project operated by Shenhua Group near Ordos city in Inner Mongolia had drained 50 million tonnes of groundwater from the water-scarce Haolebaoji region since 2006, shrinking the nearby Subeinaoer lake by 62 per cent.

This project has been hailed as an industry model with its self-claimed 'low water consuming' and 'zero emission' technologies. If this groundwater draining model is going to be copied ... it would lead to rampant eco-disasters

The report, released after a five-month field investigation, comes as the mainland is on a fast track to expand the water-intensive coal-to-chemicals industry. At least 13 such projects were approved by the National Development and Reform Commission in the first half of this year with more than 100 others waiting for approval, Greenpeace East Asia campaigner Deng Ping said.

"This project has been hailed as an industry model with its self-claimed 'low water consuming' and 'zero emission' technologies," Deng said. "And if this groundwater draining model is going to be copied by other projects, it would lead to rampant eco-disasters."

Greenpeace said it found the project was discharging wastewater containing high concentrations of toxic chemicals without proper treatment. The water problems have led to rising discontent among local herders, whose lives have been disrupted since the company started to build 22 deep wells in 2003 and began extracting water in 2006.

Shenhua's coal-to-liquid project has a production capacity of 1.08 million tonnes a year, with plans to expand to five million tonnes. Greenpeace said the project's water use would triple to 41 million tonnes by 2017.

An environmental protection officer with China Shenhua Coal to Liquid and Chemical, which owns the project, denied water extraction was the sole cause of ecological degradation in the region. "The reasons for the degradation are rather complicated, for instance, the reduced rainfall in the area. So it is difficult to decide the direct impact of the project on local ecology," said the officer. He admitted the project had led to rising grievances from local herders, who "tried to block our gates". He added: "There's not much we could do except reflecting their problems to local government."

A Shenhua Group spokeswoman said the company took the allegations "very seriously" and would start its own investigations, according to Reuters.

Deng said projects by state-owned energy companies were sought after in the coal-rich west by local governments in their pursuit for economic growth, ignoring water constraints and public opposition.

But their poor environmental records and strong political influences made meaningful supervision extremely difficult. In the first half of this year alone, Shenhua Group has twice been fined for environmental violations.