Natural gas boom's future may be in China

WASHINGTON – China is expected to double its demand for natural gas in the next five years, making it an irresistible market for Western companies attempting to export America's energy bonanza and to exploit China's own vast reserves.

Chinese cities are choking in smog, and its government is intent on ­moving the country away from coal to cleaner-burning natural gas, said Anne-Sophie Corbeau, a senior gas analyst for the International Energy Agency.

"This is becoming priority number one," Corbeau said Tuesday as she presented the agency's forecast at the Center for Strategic and International Studies in Washington.

Western energy companies are hoping to cash in by sending American natural gas overseas. BP last month signed a $20 billion deal to send liquefied natural gas in tankers to China starting in 2019, with much of the supply expected to come from an export plant in Freeport, Texas, that is awaiting federal approval.

Numerous other companies are also hoping to ship American natural gas overseas. But U.S. natural gas exports are controversial, and Australia and Russia have a head start in supplying the lucrative Chinese market.

China recently signed a $400 billion deal to buy natural gas from Russia's Gazprom, and Australia has seven high-price facilities under construction for the liquefaction and export of natural gas in tankers.

"There is, despite all the talk, only one single project in the U.S. under construction," Corbeau said.

There's a backlash against the push to send American natural gas overseas. Some manufacturers argue that it could raise U.S. energy costs. Environmental groups say it would encourage more fracking, in which water and chemicals are pumped into shale rock to release natural gas, resulting in more planet-warming gases.

Opponents of a proposed Cove Point export facility in Maryland are staging a protest in Washington this weekend, saying the facility "could incentivize a dramatic expansion of fracking activities."

Natural gas produces half as much carbon dioxide as coal when used to make electricity. But a new Department of Energy report suggests that the greenhouse gas benefit could be offset by the methane leakage and energy needed to drill for natural gas in the United States and then ship it in tankers to China.

In addition to importing natural gas, China is aggressively seeking to tap its own energy reserves. China has large natural gas reserves in shale rock, but it has struggled with efforts at fracking to harvest it.

FTS International, a fracking service provider based in Fort Worth, Texas, last month announced that it signed a 15-year joint venture with the Chinese state-owned company Sinopec, the first such collaboration aimed at developing Chinese shale.

International Energy Agency natural gas specialist Corbeau said it's an open question whether China will be able to use fracking to harvest its shale gas.