Three Ministers of China¡äs Energy Industry Talking About the CBM Exploitation

    Some major leaders of China¡äs energy industry recently appeal to 
the State to give some favored policies to support the CBM exploitatio
n. According to them, the exploitation of CBM in a planned way will be
 of great significance to  the readjustment of China¡äs energy structu
re, protection of environment, improvement of coal mine safety conditi
ons and basic control of coal mine gas accidents.
    China has abundant CBM resources of 35,000  billion mª¬3 that is e
quivalent to 45 billion tons standard coal, and is equivalent to China
¡äs conventional natural gas resources. For this reason, to quickly ex
ploit CBM industry is in conformity to the major principle of China¡äs
 energy development, and will gain a comprehensive benefits.
    Minister Wang Senhao of the coal industry, minister Song Ruixiang 
of the geology and mineral resources and Vice-President Zhou Yongkang 
of CNPC said when interviewed by correspondents that the State should 
make great efforts to develop CBM industry to improve as soon as possi
ble China¡äs energy structure with a new replaceable energy to keep a 
sustainable, steady and sound development of national economy. 
    Mr. Wang Senhao says that the exploitation of CBM will help to con
trol basically coal mine gas accidents. The CBM has caused great harms
 to coal mine safe production. Since the founding of PRC, there have h
appened coal and gas outburst accidents for more than  15,000  times, 
which amount to 1/3 of the world total. So, the extraction of CBM befo
re coal mining in a planned way will greatly reduce the gas in coal se
ams and therefore will basically avoid  the gas accidents and lessen p
ersonnel death and injures and economic losses. 
    He says, compared with the developed countries, China¡äs per capit
a energy share is less, the energy structure is unreasonable and the p
er capita natural gas share is particularly low. At present, the CBM e
stimated in China is equivalent to that of conventional natural gas. T
he CBM reserves are 3 times of that of USA and have great potential. T
he exploitation of China¡äs CBM industry will facilitate the developme
nt of China¡äs clean gas energy industry and create conditions for the
 readjustment  of China¡äs energy structure.   
    Mr. Song Ruixiang says, in the world energy structure,petroleum am
ounts for 38-40%, coal 25-30% and natural gas to 20-22%, but in China
¡äs energy structure, coal accounts for 75% and natural gas only 2% wh
ich is greatly lower than that of the world energy structure. We can s
ee that China¡äs energy structure is quite unreasonable. In addition, 
burning coal in great amount will cause serious environmental pollutio
n.
    He says, China¡äs 70% CBM  are distributed in the central and east
ern regions that are lack of energy. The exploration, development and 
utilization of this tremendous natural gas will be of important signif
icance to the promotion of the economic development of central and eas
tern regions of China and reduction of  environmental pollution.
    Mr. Zhou Yongkang says, the methane discharged yearly by China¡äs 
coal mines is about 5ª±6 billion mª¬3. It is not only a waste of energ
y but pollution of the environment. It has aroused social concern. The
 exploitation of CBM will greatly reduce the methane discharge during 
coal mining. It will facilitate both energy development and environmen
t control. 
    He says, US CBM resources are about 1/3 of that of China, but it i
s developed and forms a complete industry rapidly because it is suppor
ted by its government¡äs  favored  tax policy on the commercial produc
tion.
    China¡äs coal mines have 40 years experience in underground gas dr
ainage. But its recovery and utilization rate is low due to the small-
scale production and backward technology. According to the 3 ministers
, the major reason for the slow step of China¡äs CBM exploitation is t
hat the investment and policy inclination are not enough. In the start
-up period, China¡äs CBM industry urgently needs government¡äs policy 
support in investment, taxation and CBM price. Otherwise, it will be u
nfavorable for China¡äs CBM exploitation, with the utilization of fore
ign funds and international cooperation progress in particular.
    Compared with conventional natural gas, CBM is more difficult to e
xtract, the output per well is low but the initial investment is high.
 Under current situation, CBM enterprises have to run some risks in th
e economic benefits. For promoting  China¡äs CBM exploitation, the thr
ee ministers suggest that the State formulate some favored policies as
 follows:
    (1)  Investment policy(continued on page 6)