The Next Fracking Frontier: China?

On Shanghai’s Huangpu River, a barge hauls coal upstream to one of the power plants that keeps this city booming. China is the world’s biggest energy guzzler, and it gets three-quarters of its power from coal.

But coal is one of the dirtiest fuels around. It’s the main reason so many of China’s cities are choked with smog, and why China is now the world’s biggest greenhouse gas polluter.

China energy analyst Bill Dodson says it’s “one of the disappointments in China’s rapid development… that it chose to use technologies that are about 200-years-old.”

But these days China is scrambling to find newer and cleaner technologies. And it thinks it’s found a promising one in hydraulic fracturing, or fracking.

Fracking is a relatively new way of getting at cleaner-burning natural gas. It uses pressurized water and chemicals to fracture soft shale rock deep underground and pump out natural gas trapped inside. The technology is revolutionizing energy markets and helping gas take a big bite out of coal use in the US.

“We’d like to repeat the same successful story in China,” says Yang Fuqiang, with the Natural Resources Defense Council (NRDC) in Beijing,

Yang says China is already making big strides in pollution-free power sources like wind and solar, but they’re still likely to provide only 15 percent of China’s energy by 2020.

“That is not enough'” Yang says. “So I think another way is to develop more natural gas and shale gas.”

China has huge untapped shale gas deposits, and supporters hope they can be a bridge between coal and broader use of renewables. The country has drilled several dozen trial wells, and in March, state-owned PetroChina signed its first production agreement with Shell. China has also invited other global energy players to bring in their technology and expertise.

But no one’s sure the investment will pay off.

“There is no guarantee that the technology will be suitable for China,” says Tao Wang, a scholar at Beijing’s Carnegie-Tsinghua Center for Global Policy. Much of China’s shale may be difficult to fracture. It also tends to be under rugged and remote terrain. So Tao says the Chinese are tempering their hopes for fracking.

Then there are the perhaps more formidable challenges.

Perhaps the biggest is that fracking requires huge amounts of water. That’s a big concern in a place like China, where the country’s age-old problem of water shortages is written into traditional songs like “The Yellow River is Dry.”

Energy analyst Bill Dodson says China’s water problems are only getting worse, and fracking would have to compete for the ever-scarcer supplies with industry, agriculture, and growing cities.

But others say that’s not a deal-breaker.

Ming Sung, a former chemical engineer for Shell who’s now with the Clean Air Task Force, says he’s cautiously optimistic about the environmental benefits of fracking, in part because there are now technologies that allow fracking operations to recycle the water they use. Researchers are also exploring chemical alternatives to water.

But that just gets to other concerns about fracking.

Opponents say the chemicals used in fracking already pose a hazard to water supplies. There’s also concern about leaks of methane into the atmosphere. Ming says such leaks could undermine one of fracking’s major benefits, because as a greenhouse gas, methane “is 20-some to 100 times worse than CO2.”

All of these environmental concerns have led to a significant public backlash against fracking in the U.S. The NRDC’s Yang says many Chinese environmental groups still don’t know much about the technology. But it’s just a matter of time before they learn. And China’s environmental movement is becoming more assertive. In July, a protest against plans for a new waste water pipeline in Qidong led authorities to scrap the project the very same day.

For now at least, the Chinese government has modest hopes for fracking. Its targeted shale gas production will cover just two or three percent of the country’s energy needs by 2020.

But like so much else in China these days, the energy picture is changing fast. And what happens with fracking here could ultimately have a major impact around the world.