China's major natural-gas potential

But the biggest shale-gas reserves may be lurking in China. At the end of last year the IEA estimated the country’s total recoverable resources at 50tcm, over 70% of it in shale beds, most of the rest coal-bed methane. China already extracts prodigious quantities of the latter—some 10bcm last year. Only a handful of test wells for shale gas have been sunk, and it looks as though the geology may make it harder to get at than America’s.

But China has ambitious targets for getting its hands on it all the same. It wants to use a lot more gas to generate electricity and to fuel its expanding fleet of cars. Since 2000 its appetite for gas has grown by around 15% a year as the lights have come on in new towns and cities and the country’s breakneck economic expansion continues. At present gas makes up just 4% of the country’s primary-energy consumption. The latest five-year plan envisages an increase in that share to 8% by 2016. Even then, China will still lag far behind most rich countries, where gas generally makes up a quarter or more of the total energy mix.

Because of China’s vast size, what sounds like a small shift could have massive implications for the global gas market. An increase of one percentage point in China’s consumption is reckoned to equate to 25bcm a year, roughly half of what Qatar, the world’s biggest exporter of LNG, puts on the market annually.