The U.S. Experiences in Coal-based Synthetic Natural Gas and Its Lessons for China

Publication - 2014-08-11
Recently, the Chinese government is including coal-based synthetic natural gas (‘SNG”) in its policy agenda to mitigate smog problems in eastern Chinese cities. In 2013, China’s National Energy Administration suddenly accelerated the approval of many coal-based SNG projects. According to statistics gathered by Greenpeace, as of June 2014, there were a total of 50 coal-based SNG projects in different stages of development throughout China with an annual production capacity of 225 billion cubic meters. Currently, the rapid development of coal-based SNG is being intensely discussed by different stakeholders. In a recent Nature Climate Change article “China’s Synthetic Natural Gas Revolution” , Dr. Chi-Jen Yang of Duke University, a renowned expert on energy and environmental policy, expressed his concerns on the rush development of coal-based SNG in China. Through the media, Dr. Yang has also warned that “China is currently repeating the mistakes that the United States made in the 1980s, but what’s different is that the United States only built one coal-based SNG plant, which made it easier to control emissions and deal with bankruptcy, but things are very different in China today.” Greenpeace invited Dr. Chi-Jen Yang to prepare this report, which aims to provide a detailed overview of the history and lessons of the Great Plains Synfuels project, which can serve as a cautionary tale for the coal-based SNG development in China.

Recently, the Chinese government is including coal-based synthetic natural gas (‘SNG”) in its policy agenda to mitigate smog problems in eastern Chinese cities. In 2013, China’s National Energy Administration suddenly accelerated the approval of many coal-based SNG projects. According to statistics gathered by Greenpeace, as of June 2014, there were a total of 50 coal-based SNG projects in different stages of development throughout China with an annual production capacity of 225 billion cubic meters. Currently, the rapid development of coal-based SNG is being intensely discussed by different stakeholders.

In a recent Nature Climate Change article “China’s Synthetic Natural Gas Revolution” , Dr. Chi-Jen Yang  of Duke University, a renowned expert on energy and environmental policy, expressed his concerns on the rush development of coal-based SNG in China. Through the media, Dr. Yang has also warned that “China is currently repeating the mistakes that the United States made in the 1980s, but what’s different is that the United States only built one coal-based SNG plant, which made it easier to control emissions and deal with bankruptcy, but things are very different in China today.”

Greenpeace invited Dr. Chi-Jen Yang to prepare this report, which aims to provide a detailed overview of the history and lessons of the Great Plains Synfuels project, which can serve as a cautionary tale for the coal-based SNG development in China.

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