According to the latest Bloomberg report, with power plants across China burning half the world’s coal, the government’s latest targets for using more natural gas to ease the country’s worsening air pollution seemed too ambitious.
Though gas remains a small and expensive component in China’s fuel mix, demand is rising faster than expected for domestic and imported supplies. In April, consumption was 22% higher than the same month in 2016, and the total for the first four months of the year is up more than 12%.
The results are encouraging analysts to upgrade their demand forecasts and may signal the government is on track to reach its goal of getting as much as 10% of its energy from gas by 2020.
Unlike the US, where cheap and ample supplies of gas led to a surge in use by power plants and factories that now exceeds coal, China’s domestic output costs more to produce and the country relies on long-distance imports, including LNG carried by tankers.
China is leaning on gas as one tool for easing the air pollution that is choking cities from Beijing to Shanghai.
Transportation is also seen as a growth driver through 2020, with more long-haul trucks running on LNG. Major manufacturers sold about 1900 LNG-fuelled trucks in the first two months of 2017, a five-fold increase from the same period in 2016. Transportation accounts for about 10% of Chinese gas demand.
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