With NDRC Pushing the Use of Natural Gas, Market is Expected to Open a New Golden Decade

After Guidance on Strengthening Regulation of Gas Distribution Pricing published in the late June, NDRC officially issued The Opinion on Accelerating the Use of Natural Gas (hereinafter referred to as The Opinion) in July 4th. Experts said that the release of this document means that gas will usher a new “golden decade” in china”, which will bring great benefits to the China’s largest natural gas producer Petro China, and upstream and downstream enterprises in this industry chain.

Improving the utilization of natural gas in various fields

According to The Opinion, this reform should focus on clean alternative to fuel and emerging market development as the main starting point to accelerate extensive, efficient and scientific utilization of natural gas in these fields like: urban gas, industrial fuel, gas-fired power generation, transportation and so on. This reform will promote the coordinated development of the middle and lower reaches of gas industry, making the proportion of natural gas in primary energy consumption increase significantly.
The main aim of this reform is to gradually cultivate natural gas as one of the main energy sources of modern clean energy system in China. By 2020 and 2030, the proportion of natural gas in the primary energy consumption structure respectively reached 10% and 15%. The reform focuses on winter clean heating in north area, changing fuel from coal to natural gas in industry and civil use, natural gas peaking power generation, natural gas distribution, natural gas vehicle and vessel and so on.

“The Option is in line with the big framework of China’s oil and gas system reform, which will improve the use of natural gas in every fields. Through the tool of natural gas, clean energy will be popularized which finally adapts to the construction of the whole ecological civilization” Professor Liu Yijun, a gas expert of China University of Petroleum said to the Shanghai Newspaper in an interview.

In his view, after The Opinion published, generally make the policy of oil and gas reform more systematic. The release of the document means that natural gas will usher in a new “golden decade” in China, which will have a profound and lasting impact on the entire natural gas industry chain.

Natural gas vehicle and vessel, “coal to gas” promoted.

The Opinion has put forward the key tasks including the implementation of urban gas projects, natural gas power generation projects, industrial fuel upgrade projects and traffic fuel upgrade projects. Specifically, the Beijing-Tianjin-Hebei region and the key cities (2 +26) which are within the surrounding air pollution transmission channel will conduct as the starting point and strive for the realization of natural gas, electricity, residual heat, shallow ground and other heating taking place of dispersed use of coal in qualified areas within 5 years. At the same time, we should rapidly improve the level of gas supply to urban residents; open up the use of natural gas at the “last mile” and set up the countryside pilot of natural gas to encourage a variety of subjects involved; and vigorously develop distributed energy of natural gas; encourage the development of natural gas peaking power station, orderly develop natural gas cogeneration.
In addition, The Opinion proposed to accelerate the development of natural gas vehicle and vessel to improve the proportion of natural gas in public transport, freight logistics and ship fuel. As far as Liu Yijun´s concerned, the promotion of natural gas vehicle has regressed in some domestic areas, and once the policy implement in place, it will bring great effect on consolidating the role of traffic gas.
Finally, The Opinion proposed to add “coal to clean energy” into environmental assessment. Establish the assessment of accountability mechanism of the implementation of environmental protection policy in provinces (autonomous regions and municipalities) , and earnestly implement the “party and government with the same responsibility “and “a post double responsibility” in environmental protection , and bring the “coal to gas” of the household and industrial fuel into the assessment content to ensure the implementation of the effect.
“Coal to gas” is the most important aspect of natural gas utilization, but meantime it is faced with many difficulties. “The above provisions are very ruthless, and it will force the local government to promote “coal to gas” and provide continuous policy support.” Liu Yijun said.

The Paper