SYNTHETIC NATURAL GAS
China’s abundant coal resources can be used to produce synthetic natural gas (sometimes called “SNG”). The SNG can be piped into cities, where it produces less local air pollution when burned than coal. However, there are several problems with such a strategy for cutting local air pollution. First, SNG is expensive. Second, SNG requires enormous amounts of water. Third, SNG production results in significant emissions of carbon dioxide (CO2). The lifecycle CO2 emissions of SNG are much more per unit of heat or electricity than coal.
As one Chinese expert said, synthetic natural gas plants “do not reduce emissions. They only shift emissions elsewhere. Actually, they increase emissions.”
As of July 2019, five pilot synthetic natural gas projects were operating in China, with a total capacity of just under 6 billion cubic meters per year (bcm/year). In 2018, these projects produced 2.3 billion cubic meters of SNG.
Roughly 80 SNG projects with a cumulative capacity of more than 300 billion cubic meters are in different stages of the development pipeline. Whether these plants will be built is unclear. One source notes that, after 10 years of effort, China’s synthetic natural gas industry is still in the “pilot demonstration stage.” New projects struggle to receive environmental approvals, with none granted in 2018. Water source approvals are also a challenge.
Several Five-Year Plan targets for SNG capacity have been missed.
- The 12th Five-Year Plan set a goal of 15–18 bcm/year of SNG capacity by 2015, however by 2015 only 3.1 bcm/year of SNG capacity had been built.
- The 12th Five-Year Plan also set a goal of 60 bcm/year of SNG capacity by 2020. The 13th Five-Year Plan cut that 2020 target to 17 bcm/year (roughly 4 bcm/year in each of four locations: Xinjiang Huaidong, western Inner Mongolia, eastern Inner Mongolia and north Shaanxi).
In general, governments in coal provinces support synthetic natural gas projects. In 2017, a 1,279 km synthetic natural gas pipeline project was approved by four provincial governments (Inner Mongolia, Shanxi, Hebei and Tianjin).
In 2017, China’s National Standardization Committee began implementing its first synthetic natural gas standard.
The global warming implications of Chinese synthetic natural gas production could be significant. One recent study found that using synthetic natural gas for electricity generation and industrial heat generation produces roughly 40%–70% more CO2 emissions than directly burning coal.
- Production of 17 bcm/year of SNG (the 2020 goal in China’s 13th Five-Year Plan) would result in roughly 72 million metric tons of CO2 — roughly 0.75% of China’s 2018 CO2 emissions.
- If the industry were to scale from there, reaching the original 2020 target of 60 bcm/year of production, CO2 emissions from SNG production would exceed 250 metric tons per year -- roughly 2.5% of China’s 2018 CO2 emissions.
 Yue Qin et al., “Air quality, health, and climate implications of China’s synthetic natural gas development,” Proceedings of the National Academy of Sciences of the US (April 24, 2017); Henry Gass, “China Push into Synthetic Natural Gas has Pollution Consequences,” Scientific American (October 2, 2013).
 Lin Boqiang, Director, China Center for Energy Economics Research, Xiamen University, quoted in “‘Irrational’ Coal Plants May Hamper China’s Climate Change Efforts,” New York Times (February 7, 2017).
 ARA International Limited, “China Natural Gas Map” (accessed July 30, 2019); “China Natural Gas Market Review in 2018 and Outlook in 2019,” China Energy News (January 24, 2019); Hu Yuejun, “煤制天然气深度调查：70个项目大干快上 示范项目盈利难” [Synthetic Natural Gas In-depth Investigation: 70 Projects Launched, but Difficult to Make Profits], China Energy Net (June 16, 2017) at Appendix.
 ARA International Limited, “China Natural Gas Map” (accessed July 30, 2019); “Most coal-to-gas companies can’t survive,” China Energy News (December 6, 2018); 北极星电力网新闻中心 [Bjx News Center], “聚焦| 2016年煤制气项目发展状况分析” [Focus: 2016 Synthetic Natural Gas Projects Development Status Analysis] (March 28, 2017); Kathy Chen and David Stanway, “China resumes environmental approval of coal-to-gas projects,” Reuters (May 20, 2016).
 NDRC, “12th Five-Year Plan of National Natural Gas Development” (December 2012).
 National Energy Administration (NEA), “煤炭深加工产业示范‘十三五’规划” [13th Five-Year Plan of National Coal Deep Processing Industry Demonstration] (February 2017).
 Jiansong Sun, “中海油气电集团蒙西煤制天然气外输管道项目获核准” [“The Mengxi Synthetic Natural Gas External Transportation Pipeline Projects at China National Offshore Oil Corporation Gas & Power Group were Approved”], Sina Finance (January 18, 2018).
 Coal China, “煤制合成天然气国家标准获批发布” [National Synthetic Natural Gas Standards were Approved and Released] (January 18, 2017).
 See Yue Qin et al., “Air quality, health, and climate implications of China’s synthetic natural gas development,” Proceedings of the National Academy of Sciences of the US (April 24, 2017) at Table S5 (comparing coal and SNG CO2 emissions) and note 13 (4.25 kg CO2 per cubic meter SNG produced).