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While this is not necessarily news that the Chinese populace wants to hear, a new report released Thursday by the country’s environmental ministry said that the number of pollution sources in China has increased by more than half in eight years.
The report was released by the newly formed Ministry of Ecology and Environment (MEE)as it embarks on a nationwide survey to determine the damage done by more than 30 years of unprecedented economic growth.
The report also comes as Beijing tries to rein in both water and mostly air pollution in its major urban centers. Just two weeks ago, Chinese President Xi Jinping, as part of his effort to consolidate more power, heighted his war on pollution by creating so-called super agencies, including the MEE.
The MME’s mandate includes efforts to curb greenhouse gas emissions, an uphill battle given that China is by far the world’s biggest greenhouse gas polluter. The ministry will also take charge of protecting water resources from pollution.
Reuter’s reported that the government is currently conducting a second nationwide “environmental census” aimed at identifying pollution threats throughout the country. The first was published in 2010.
Hong Yaxiong, the head of the ministry’s pollution survey office said that “the goal for the census is to do thorough data collection so that it can reflect the extent of the pollution.”
Moreover, it appears that the MME has some real enforcement power coming out of the gate, something former environmental ministries lacked, often being stymied from acting or even bullied by deep-pocketed, politically powerful companies, including Chinese three state-run oil-majors.
On Wednesday, the MME announced that the government is holding 1,048 people, including 159 department level officials, in seven provincial-level regions accountable for environmental damage, following an investigation by central authorities.
Tackling pollution is one of the “three tough battles” that China aims to win in the next three years, state-run news agency Xinhua said on Wednesday.
Creating LNG export opportunities
However, another major take-away from Jinping’s pledge to fight rampant pollution and the formation of the MME is its impact on global gas markets. As China presses ahead with its mandate of making cleaner burning natural gas make up at least 10 percent of its power generation mix by 2020, with more targets set for 2030, the country’s gas demand, including liquefied natural gas (LNG) imports, will grow continue to grow in lock-step.
In fact, China’s increased air pollution fight and its impact on the country’s gas demand will revolutionize LNG markets in the Asia-Pacific region, creating new opportunities for LNG producers from Australia, the U.S., Russia and others that need to sign long-term off-take agreements to finance new massive CAPEX-intensive LNG export facilities, thus allowing them to also capture market share with the largest energy user on the planet.
In November, the Paris-based International Energy Agency (IEA) projected that China’s natural gas demand would triple by 2040 to 400 Bcm from 210 Bcm in 2016 as the country shifts its emphasis to cleaner and more efficient sources of energy.
“Policies encouraging greater natural gas consumption are being accompanied by a more open and market-oriented structure for gas supply, with reforms both in the upstream and network regulation,” the IEA said in its 2017 World Energy Outlook.
The demand growth was driven mostly by the industry sector (in particular light industries), which accounts for around 150 Bcm of the total growth, and the power sector, which accounts for around 120 Bcm, the IEA added.
In January, China’s LNG imports hit record highs amid a cold snap, pushing spot prices for the super-cooled fuel in Asia to three year highs. Prices breached the $11/MMBtu mark by the end of the year but have pulled back amid seasonally warmer temperatures in the Northern Hemisphere.
China’s January LNG imports totaled 5.18 million tonnes, compared with the previous record of 5.03 million tonnes set in December and up 51.2 percent from January, 2017, according to data from China’s General Administration of Customs.
By Tim Daiss for Oilprice.com