Eight basic work to accelerate the development of shale gas in China
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July 08 01:01:43, 2025
Abstract The shale gas industry experienced an extraordinary beginning in 2012. However, the exploration and development of this sector is still in its early stages, and it will take several years—perhaps even longer—to build a solid foundation for industrial growth. Therefore, it is essential to focus on key areas that will support long-term development and ensure sustainable progress.
The year 2012 marked a significant milestone for China’s shale gas industry, but the real challenges lie ahead. While the initial phase has shown promise, the industry needs more structured planning and strategic initiatives to thrive. To achieve this, several critical aspects must be addressed.
First, strengthening the policy framework is crucial. Although some companies benefit from subsidies, a more comprehensive system is needed. Key provinces should accelerate the development of local shale gas strategies aligned with national goals. Additionally, reducing costs by lowering import tariffs on essential equipment and establishing a dynamic subsidy mechanism based on market conditions can provide much-needed support to operators.
Second, enhancing basic geological research is vital. A national survey project focused on shale gas could significantly improve resource assessments and help develop indigenous technologies. This foundational work will lay the groundwork for future technological advancements and independent exploration capabilities.
Third, accelerating R&D efforts and introducing advanced technologies are necessary for efficient development. Focusing on optimizing horizontal drilling and multi-stage fracturing techniques while keeping costs low is essential. Establishing specialized research institutes and fostering collaboration between domestic and international players can drive innovation and technical excellence.
Fourth, developing technical standards will promote consistency and efficiency across the industry. By setting clear guidelines for surveys, storage, transportation, and utilization, the sector can grow in a more organized and sustainable manner.
Fifth, cultivating strong industry leaders is essential. Large state-owned enterprises have played a key role so far, but encouraging private participation and foreign investment can bring in new ideas and resources. This diversity will enhance competitiveness and resilience in the long run.
Sixth, demonstrating successful models through pilot projects will guide future large-scale development. Establishing demonstration zones and conducting trials in key areas can provide valuable insights and best practices for broader implementation.
Seventh, refining the bidding process and creating a transparent entry and exit mechanism will encourage more private players to join. Learning from past experiences and improving access policies will help build a fair and competitive environment.
Finally, improving regulatory oversight is key to ensuring responsible and sustainable growth. Clear management systems, environmental protections, and fair competition rules will create a stable and reliable industry landscape.
These steps, when implemented effectively, will not only support the growth of the shale gas industry but also ensure its long-term success and contribution to China's energy security. (The authors are the Secretary-General of the Foreign Enterprise Committee of the China Petroleum and Chemical Industry Federation and the Deputy Chief Economist of the National Chemical Foreign Economic Cooperation Center)