Peak Oil, Coal and Natural gas in China

[ I provide a short, 2 page overview of the paper Wang, J.L, et al. 2017 after my analysis of “A review of physical supply and EROI of fossil fuels in China”, Petroleum Science.  A more detailed, more wide ranging review can be found in the excellent post by Nafeez Ahmed’s review here

My overview:

If you read this paper you will see that the models, estimates, and estimates of Ultimately recoverable resources (URR) are so wide-ranging, and Chinese government estimates of reserves and resources extremely unreliable, since they don’t consider whether a resource is economically available, don’t calculate resources using international standards, and much of the data is weak — very few papers have been published on unconventional gas and oil.  So the authors warn the estimates are not likely to be exactly right, but they explain how they’ve come up with a recommended result that’s likely to be in the ballpark.

Another huge problem with all of the peak estimates is that less may be produced than expected, because of environmental problems.  For example, Wang et al (2017) point out that extracting shale gas may result in increased methane emissions, water use, water pollution, and induced earthquakes. Among these, water issues may be the most significant constraint. Just one well of hydraulic extraction of low permeability shale consumes on average 20,000 cubic meters of water.  China faces serious water shortage issues, so large-scale development of shale gas will certainly have serious impacts and is likely to constrain for shale gas development.    

This paper doesn’t mention that 85% of China’s coal reserves and resources are in water stressed regions, and that coal mining, coal to gas, coal to chemicals, and coal to liquids use a lot of water, though not as much as tight “fracked” gas.  Nor the impact of water scarcity will have on food production.  

Nor do the peak forecast papers consider the potential supply constraints of China’s coal resources, such as the EROI of coal production going down to the depletion of the easy, shallow coal.

I don’t know of the Chinese government realizes peak fossils are approaching, but they are increasingly turning to natural gas transportation to cut emissions.  In 2017, 93.8 thousand LNG trucks were produced in China, and by the  end of the 13th 5-year plan (2020) it’s expected that 700,000 will be produced a year, as well as increasing amounts of gas storage, fueling stations, dispensing technology, pipelines, and so on. 

So I’d nominate China to be the Last Nation Standing, since perhaps they can import Russian and other Middle Eastern natural gas after oil and coal peak.  As Richard Heinberg has pointed out, there’s a national survival interest in being the Last Nation Standing.  He wrote:  “I thought that world leaders would want to keep their nations from collapsing. They must be working hard to prevent currency collapse, financial system collapse, food system collapse, social collapse, environmental collapse, and the onset of general, overwhelming misery—right? But no, that’s not what the evidence suggests. Increasingly I am forced to conclude that the object of the game that world leaders are actually playing is not to avoid collapse; it’s simply to postpone it a while so as to be the last nation to go down, so yours can have the chance to pick the others’ carcasses before it meets the same fate.”   Richard Heinberg. February 2010.  China or the U.S.: Which Will Be the Last Nation Standing? Museletter #213.

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Wang, J.L, et al. 2017. A review of physical supply and EROI of fossil fuels in China. Petroleum Science.

This paper reviews China’s future fossil fuel supply from the perspectives of physical output and net energy output, also known as energy returned on invested (EROI).  For society, net energy – the energy available to society after subtracting the energy needed to produce the energy–is the only true energy.

Net energy analyses show that both coal and oil and gas production show a steady declining trend of EROI (energy return on investment) due to the depletion of shallow-buried coal resources and conventional oil and gas resources, which is generally consistent with the approaching peaks of physical production of fossil fuels.

Peak dates in the literature very considerably due to different assumptions about ultimately recoverable resources (URR), what kind of model was used, and differences in the historic production data.  For example, peak oil production has been predicted to occur from 2002 to 2037 with peak production rates from 140 Mt/year to 236 Mt/year.  So this paper rejects both the very high and very low forecasts, papers that didn’t consider economic factors, and then uses the average result of the remaining studies to come up with these recommended results:

  • 2014: Oil production (conventional) peak of 170 Mt/year.
  • 2021: Oil production (unconventional) peak 65 Mt/year (based on very few papers)
  • 2018: Oil production (conventional and unconventional) peak 230 Mt/year.  9.6 EJ/year)
  • 2040: IEA peak demand 780 Mt/year

Similarly, conventional natural gas production peak estimates range from 2018 to 2049 and peak production from 100 to 400 billion cubic meters (bcm)/year. Recommended results:

  • 2030: Natural gas production (conventional) peak of 190 Bcm/year
  • 2058: Natural gas production (unconventional) peak of 270 Bcm/year.
  • 2040: Natural gas peak. 350 Bcm/year. 13.6 EJ/year
  • 2040: IEA demand 600 Bcm/year

Coal production peak estimates range from 2010 to 2039 at production rates from 2314 to 6096 Mt/year.  In China in 2014, coal provided 73% of total energy supply and 66% of total energy consumption.

  • 2020: Coal peak. 4400 Mt/year.    91.9 EJ/year)

China has had an average annual GDP growth rate of 9.8% from 1978 to 2014 due to an increase in annual energy consumption from 570 million tonnes of coal equivalent per year (Mtce/year) to 4260 Mtce/year, at an average annual growth rate of 5.8% (NBSC 2015), with fossil fuels accounting for 90% of energy consumption.

It’s likely that the role of natural gas will increase, coal will decrease, and oil remain the same share of fossils consumed.   China has been a net oil importer since 1993.

[ My comment: That is, as long as imports are available.  Oil producing nation populations and petrochemical industries have been growing for decades.  If China increases their oil imports, this will affect all other nations, since after oil production nations peak, exports are expected to decline rapidly, i.e. the Export Land Model ].

Net energy or energy  (energy output minus energy input to get that energy)

In the past, fossil fuel resources with high quality (which means very little energy inputs required to extract these resources) were abundant, and their EROI values were usually greater than 30, and up to 100 and over. So there was no great need in the past to be concerned with the fossil fuel net energy outputs or EROIs. However, we have now become aware that the EROI, and hence the amount of energy surplus of fossil fuels to society, has changed recently, due to the rapid depletion of high-quality fossil fuels after 2000 (Wang et al. 2017).

The EROI of China’s overall oil and gas is much lower than that of coal and was forecast to be 9.9 in 2012. Unfortunately, there are no separate studies for the individual oil and gas industries at a national level because oil and gas are usually concomitant and their input data are also mixed. If the input data for oil and gas can be collected separately, it can be expected that the EROI of oil will be lower than gas since China’s oil industry has been developed for years and has entered its mid- and late period, while gas industry is still in its middle and early period.

The energy inputs during the mid- and later period are much larger. For example, the Daqing oil field, the largest oil field in China, has been developed for nearly 60 years and entered its late period. To maintain its production level or reduce its production decline rate, the Daqing oil field has been using advanced enhanced oil recovery (EOR) methods for many years, such as polymer flooding and the alkaline-surfactant-polymer (ASP) flooding method. These methods are well known for their high cost and environmental impact, which in turn leads to lower EROI and declines in the Daqing oil field’s EROI, which is down to 6.4 in 2012.






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