‘Irrational’ coal plants may hamper China’s climate change efforts

08 February 2017 | Mitigation

When scientists and environmental scholars scan the grim industrial landscape of China, a certain coal plant near the rugged Kazakhstan border stands out.

On the outside, it looks like any other modern energy plant — shiny metal towers loom over the grassy grounds, and workers in hard hats stroll the campus. But in those towers, a rare and contentious process is underway, spewing an alarming amount of carbon dioxide, the main greenhouse gas accelerating climate change.

The plant and others like it undermine China’s aim of being a global leader on efforts to limit climate change.

The plant, in the country’s far west, converts coal to synthetic natural gas. The process, called coal-to-gas or coal gasification, has been criticized by Chinese and foreign scholars and policy makers. For one thing, it is relatively expensive. It also requires enormous amounts of water, which exacerbates the chronic water crisis in northern China. And worst of all, critics say, it emits more carbon dioxide than traditional methods of energy production, even other coal-based ways.

“It is extremely irrational to develop coal-to-gas technology,” Li Junfeng, a climate change and energy adviser to the government, wrote in 2015 in China Energy News, a publication managed by People’s Daily, the Communist Party newspaper. He added that coal-to-gas was “unfit to become a national strategy.”

Despite such denunciations and a continuing policy debate, at least four such plants have begun operating in China in the past four years, pushed by local governments and state-owned enterprises in coal-rich regions. Dozens more have been under consideration.

No other country is considering building coal-to-gas plants on this scale.

The technology’s emerging use reveals the challenges China faces in reducing coal’s central role in the economy, particularly in the north, which has some of the world’s largest coal deposits.

Under the Obama administration, United States officials working on climate change tracked China’s use of this technology and expressed concern to Chinese counterparts, including the environmental protection minister, Chen Jining. That will most likely change under President Trump, who has called climate change a “hoax” and threatened to renounce the Paris agreement, a global accord to limit carbon emissions.

In January, President Xi Jinping said at the World Economic Forum in Davos, Switzerland, that all countries should remain committed to the Paris agreement because “this is a responsibility we must shoulder for the sake of our future generations.”

The Chinese government is trying to rein in local officials and companies in northern China that undermine central policy when acting out of economic self-interest. Too often, the actions of local governments contradict attempts by central policy makers to wean Chinese industries off coal and move toward a less carbon-heavy economy.

The plant here in the frontier region of Xinjiang is a pioneer effort by coal proponents.

Ethnic tensions in the area sometimes explode into protests or violence, and police officers in riot gear stand at barricaded posts on many of Yining’s street corners. The tensions are worsened by the large presence of the energy industry here — Xinjiang has vast coal and oil deposits, and ethnic minorities are aware that state-owned energy companies exploiting local resources are run by ethnic Han and employ mostly Han workers.

In 2013, Kingho opened the coal-to-gas plant as a pilot project closely watched by central-level officials. Xinjiang has the largest coal reserves in China. The same year, a similar pilot project opened in Inner Mongolia, another region brimming with coal.

After the market for coal slumped in 2012, local governments in northern China desperately began looking for new uses for it. Officials turned to two industries in which coal is converted to other material: coal-to-gas and coal-to-chemicals. Officials have expanded both industries across northern China, despite their detrimental environmental impact.

Two Duke University researchers published an essay in 2013 recommending that Chinese officials cancel the coal-to-gas programs. Some central government officials understood that there were risks to adopting these technologies. The National Development and Reform Commission, the government’s economic planning agency, held a forum in January 2014 for experts to discuss the effects of coal-to-gas on climate change. There have been no public reports on the conference.

China’s National Energy Administration banned the construction of any coal-to-gas plants that would produce less than two billion cubic meters of gas per year.

So while central government officials take a cautious approach to the industry, they are still allowing it to grow. Last year, a coal-to-gas plant opened in Henan Province, the first in the east. Also in 2016, the Ministry of Environmental Protection approved three new plants. And at least three existing plants are expanding.

Kingho signed an agreement last October to push ahead with a “Phase 2” expansion of the Yining plant.

Kingho declined an interview request and did not agree to take me on a tour. On a Saturday, I walked onto the grounds, after a guard in a black uniform at the main gate asked me to sign a visitors’ logbook. The roads were wide and quiet, and a few workers in uniforms rode around on electric scooters.

The plant is far from China’s largest population centers. Across the northwest, companies would have to build and operate long pipelines to get gas to cities like Beijing and Shanghai. Yet local governments and state-owned enterprises justify construction of the plants by saying they will eventually supply gas to eastern China.

The idea of transporting gas from the west aligns with pollution control policies announced in 2013. That year, after a rise in public anger over air pollution, the government said officials in populous parts of eastern China had to limit coal use, which meant those officials would have to look for other energy sources, including gas.

State-owned energy companies label coal-to-gas plants as “clean energy” or “new energy,” despite their high levels of carbon dioxide emissions. In his 2015 article, Mr. Li said that carbon dioxide emissions from coal-to-gas were 270 percent greater than natural gas from traditional sources.

“They do not reduce emissions,” said Lin Boqiang, the director of the China Center for Energy Economics Research at Xiamen University. “They only shift emissions elsewhere. Actually, they increase emissions.”

Another climate researcher, Jiang Kejun, said that if China adopted coal-to-gas on a larger scale in five to 10 years, then officials would have to find a way to get companies to use carbon capture technology to limit the effect of the emissions.

Since coal-to-gas plants are expensive to operate, market forces may end up dampening their popularity, he said.

“It’s very risky, and there is no clear future,” he said. “So I believe enterprises themselves will be very cautious.”

In early 2015, China Business Journal published a report that said a coal-to-gas plant run by a Huineng Group subsidiary in Ordos, Inner Mongolia, was operating at a daily loss of 1.12 million renminbi, about $160,000.

China has forged recent agreements with Russia and Central Asian nations to buy natural gas. Pipelines running across the Asian heartland transport the gas through Xinjiang to eastern China.

Those pipelines also damage the environment and cultural sites, but some scholars say they have greater concerns over the use of coal-to-gas.

“The development of coal-to-gas technology,” Mr. Li wrote, “will actually bring a relatively large negative influence to the already fragile local ecological environment.”



Source: The New York Times