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Business Advisory Committee Update |
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Business Advisory Committee Update |
Workshop
An International Workshop on Coal Mine Methane Market Development was held 30 November and 1 December 1999. The first day of the meeting was well attended by approximately 50 people, including representatives from 8 coal mine administrations and more than twenty representatives from foreign companies, financial institutions, or other concerned organizations. The morning session was opened by comments and presentations from Chinese and U. S Government officials, and members of State owned institutes and companies. Speakers for the first half of the morning session included Wang Xianzheng, Vice Administrator of the State Administration of Coal Industry, Robert Armstrong from U.S. Embassy (acting Consul), Karl Schultz, Team Leader Coalbed Methane Outreach Program, United States Environmental Protection Agency (U.S. EPA), Li Jinzhu, President of China Coal Information Institute, and Sun Maoyuan, Vice President of China United Coalbed Methane Co., Ltd.
Comments given during this session recognized the importance of coal mine methane as an energy source for China's future. Furthermore, the Chinese energy industry sector is acting as an important area of cooperation between foreign and Chinese governments as clean energy sources are sought and environmental issues are resolved. Cooperation between the China United Coalbed Methane Corporation (CUCBM), local coal mining companies and foreign investors is important, but market and infrastructure development is the key to realization of widespread growth in the use of coal mine methane.
Speakers for the second half of the morning included: Dou Qingfeng. Director of the China Coal Information Institute; Raymond C. Pilcher President of Raven Ridge Resources, Incorporated; and Huang Shengchu, Deputy Director of the China Coalbed Methane Clearinghouse. Speakers discussed past cooperation and recounted the success of joint projects among the Chinese Government, the United Nations Development Programme, and the U.S. EPA. The U.S. EPA presented a cooperative plan for marketing coal mine methane projects. The two-year program will begin with the Jincheng Coal Mining Administration, but plans include identifying and marketing projects at several Coal Mining Administrations. Mr. Huang Shengchu closed the session with a presentation on technology that has been employed in coal mine methane projects in other parts of the world. The technology that was discussed could be adapted for use under the economic and technical conditions of China.
The afternoon session began with a presentation that summarized an economic study of potential coal mine methane projects conducted by the China Coalbed Methane Clearinghouse. The study looked at options for methane use at several mines and acts as an introduction to coal mine methane project opportunities. Several coal mining administrations and a few coalbed methane exploration and service companies presented information regarding their enterprises during the remainder of the afternoon. The presentations revealed details regarding a number of project opportunities that exist among the gassiest coal mines in China. Chinese exploration and service companies have acquired or developed equipment and experience that can act as the foundation for development of coalbed and coal mine methane resources in China.
Steering Committee Meeting
On the morning of 1 December 1999 the China Coal Mine Gas Industry Steering Group met for approximately an hour. This group or "Steering Committee", comprised representatives of eight coal mining administrations, CUCBM, China Coalbed Methane Clearinghouse, and U.S. EPA. A representative of the Asian Development Bank also attended. During this meeting several observations and concerns were stated, and in many cases repeated; signaling that there are common problems shared by all Chinese organizations interested in developing coal mine methane projects. The following summarizes some of the shared concerns and comments:
， Although foreign companies have demonstrated their interest in developing coalbed methane resources, outside financial sources for development of coal mine methane resources have lagged;
， The Asian Development Bank (ADB) is supporting a coal mine methane power generation project feasibility study at Yanguan but would like to see other coal mine methane project opportunities develop. Even as feasible projects are identified, Chinese government support and a request for financial support is necessary before ADB is able to commit funds for development loans;
， Several coal mine administrations noted that while they were in various stages of planning and development of CMM projects, infrastructure development that would allow them access to markets was lacking.China Business Advisory Committee
Comments, observations and shared concerns expressed by the members and participants of the China Coal Mine Gas Industry Steering Group were reported to the assembled members of the China Business Advisory Committee (BAC) as its first meeting was convened later on the morning of 1 December. After initial comments were made by the conveners of the BAC; several industry participants offered their observations regarding needs that must be met for timely development of CMM projects. The issues and observations that are listed below are in some cases the synthesis of ideas presented by several speakers:
， Systematic market surveys must be performed. Communities surrounding coal mines are a likely market, but the variability among various communities' energy needs can be significant. A better understanding of this must be achieved. Although almost everyone is certain that there is a market for CMM, the size is ill-defined and access to the market is often difficult.
， One potential solution to using more CMM is to support the idea of distributed power. Several CMAs would like to build power generation facilities to supply their own needs as well as that of the neighboring communities.
， There is a clear need for pipeline construction. CUCBM and the central government are discussing various options. A pipeline construction program will aid development of CBM and CMM resources.
， The process that an investor/developer must undertake to make a deal with a CMA is not as transparent as it should be. Several foreign company representatives suggested that the process should be more straightforward and streamlined with expectations of a reasonable turnaround time.
， The value of CMM development to improving safety in the mine and improving health in the surrounding communities should be recognized and quantified. China could put a premium on incentives for developing this resource and still realize an overall benefit when the social costs are accounted for.
The meeting was adjourned more than two hours later than was planned, indicating the enthusiasm of the attendees. The director of the China Coalbed Methane Clearinghouse, Mr. Dou Qingfeng, and his Deputy Director, Mr. Huang Shengchu, Mr. Karl Schultz, U.S. EPA, and Mr. Zhang Sui'an, Professor and representative of CUCBM, made closing comments and thanked the attendees for their comments and hard work during the conference.