U.S. shale methanol soon en route to China

Wu Lebin, chairman of Chinese Academy of Sciences Holdings Co (Photo provided to China Daily)

China is investing heavily in North American shale gas in order to commercially extract methanol for use as an environmentally sustainable motor fuel, a leading executive behind the multibillion-dollar project said.

Spearheaded by Shanghai Bi Ke Clean Energy Technology Co Ltd, a State-owned enterprise focused on methanol production, a plant has been set up in the state of Washington to produce methanol from the shale gas, said Wu Lebin, chairman of Bi Ke's parent－the Chinese Academy of Sciences Holdings Co Ltd.

He said the plant had attracted $6 billion in funding from both Chinese and United States investors.

Wu said that he expected the first batch of methanol to be shipped to China via seaborne carriers by 2019.

"If we replace diesel, coal and gas with methanol to power vehicles, emissions of PM2.5 (a critical air pollutant) would be slashed by 80 percent, and carbon emissions would be halved," he said, adding that the cost is only two-thirds that of coal.

China has factored in environmental concerns while maintaining economic growth, by transitioning from the use of coal to other cleaner energy such as liquid natural gas.

Utilizing methanol as a source of power has been adopted by a number of Chinese companies, Wu noted, but the technology to convert shale gas into methanol is "cutting-edge", he added.

The US is a favorable source of shale gas thanks to easy access, the low cost of electricity and a close location for international shipping, Yuhuang Chemical Inc CEO Charlie Yao said.

Yao's company has also established a plant in the US－in Louisiana－to produce methanol for the Chinese market.

By 2020, proven reserves of shale gas will surpass 1.5 trillion cubic meters, according to the 13th Five-Year Plan (2016-20) on the energy sector released by the National Development and Reform Commission and the National Energy Administration.

China has steadily increased its ability to extract shale gas in recent years and aims to substantially improve its shale gas yield in the next decade and beyond.

Annual output is expected to reach 30 billion cu m by 2020 and jump to a range of 80 to 100 billion cu m in another 10 years, the NEA said.