China expects to set new records for coal and natural gas production this year, but will be cutting the share of coal consumption in the total primary energy mix while raising the natural gas share, the Chinese National Energy Administration (NEA) said on Wednesday.
In 2018, China’s natural gas production is expected to rise by 8.5 percent over 2017 to a record high, while coal production is also expected to reach an all-time high, rising by 7.3 percent year on year, according to the NEA.
Nevertheless, the Chinese push to reduce pollution will result in decreased coal consumption out of the total mix, with plans to lower it to around 59 percent this year, and to half of the energy mix by 2020 by increasing renewable energy production.
Natural gas consumption is expected to rise and account for 7.5 percent of the energy mix this year.
Last month, the National Bureau of Statistics of China said that coal consumption last year ticked up 0.4 percent, crude oil consumption grew 5.2 percent, and natural gas rose 14.8 percent. Consumption of coal accounted for 60.4 percent of China’s total energy consumption in 2017, down 1.6 percentage points over 2016. Clean energy consumption—which China defined as natural gas, hydropower, nuclear power, and wind power—accounted for 20.8 percent of energy consumption last year, up 1.3 percentage points over 2016. Related: Shale Boom Could Create A Refining Bottleneck
According to the recently released BP Energy Outlook 2018 with estimates through 2040, China’s energy mix will continue to evolve with coal’s dominance declining from 62 percent in 2016 to 36 percent in 2040, natural gas nearly doubling to 13 percent, and renewables’ share soaring from 3 percent in 2016 to 18 percent in 2040.
The Chinese push to cut pollution and make millions of households switch to natural gas from coal for heating resulted in China becoming the world’s second-largest importer of liquefied natural gas (LNG) in 2017, outpacing South Korea and second only behind Japan, the U.S. EIA said last month. Chinese LNG imports surged 46 percent last year. Despite the fact that China increased its domestic production and pipeline imports last year, natural gas shortages in northern China led to record levels of LNG imports during the winter. Overall, natural gas imports accounted for 40 percent of China’s 2017 natural gas supply, and LNG made up more than half of those imports, the EIA said.
By Tsvetana Paraskova for Oilprice.com
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