Policies for promoting the development of unconventional natural gas resources in China

By comparing the successful experiences from the U. S. unconventional gas development and utilization, this paper first overviews the developing status of unconventional natural gas resources in China. Then through an analysis of its potential and prospect, it concludes that in the next one to two decades, the unconventional natural gases will become the main source of natural gas reserves and contribute to the surge of gross cumulative gas production, therefore, playing an increasingly important role in the guarantee of national gas supply. However, the following problems and challenges are still to be faced up with: (1)The previous administrative monopoly control restricts the still growing competition in the resource development and marketing. (2)Regulatory policies obviously lag behind due to the conflicting mining rights for the development of unconventional natural gas resources. (3)Imperfect finance and taxation policies can not support the shale gas development. (4)The bottleneck problems become highlights for lack of core technical support. (5)The rather low natural gas prices have already hindered the development and utilization of unconventional gas resources. (6)There is lack of a fair system for the admission to the pipe grid, the infrastructure of which is lagging far behind. (7) Resource reserves have not been discovered yet because of poor fundamental work. (8) The task of environmental protection is a hardship. In the end, this paper presents some suggestions. (1)The reform should be deepened to open the upstream market in an orderly and steady way and the market supervision should be strengthened. (2)The new position of the shale gas mining right is clarified by one-level management. (3)A preferential policy system should be adjusted and completed with robust policy support. (4)The core techniques should be studied and developed to tackle those bottleneck problems. (5)Regulations and standards should be issued to strengthen the fundamental work. (6)International cooperation and communication should be encouraged to develop more industrial demonstration areas. (7)Environmental protection should be highlighted before any possible hazards occur. (8)The infrastructure construction, of the pipe grid for example, should be completed to promote the development and utilization of unconventional natural gas. (9)Reforms on gas prices should be deepened to have a perfect gas pricing system.