Like much of the rest of the developing world, China burns a LOT of coal, with coal providing at least 77% of electricity (Mongolia beats them out, with 96.1% of its electricity coming from coal, while the US uses coal to produce less than half of its electricity). Not surprisingly, China is the world's largest consumer of coal and has actually started importing coal as of 2008. During my time in Harbin, you couldn't open your windows without a film of coal dust coating your windowsill in a few minutes and there were days where a green haze descends over the city, making the air unbreathable. The coal use has not only produced a slightly disturbing carbon footprint and health issues for Chinese residents, but also political unrest. Much of China's coal deposits are located in Inner Mongolia, a province primarily populated by shepherds, and China has ramped up coal production, in part to decrease its dependence on foreign coal. The increase in mining has the locals a bit upset, in part because its extremely invasive, sucking up scarce, valuable water, and in part because the mines are being worked by non-Mongols, creating ethnic friction. Basically everything about coal is causing China problems. So what's the solution? It could be natural gas. (Disclaimer: My knowledge of the energy industry is somewhat limited, so these are my thoughts based on the facts I do know.)
1. Gas would ease domestic political unrest.
Natural gas is a pretty exciting emerging alternative to oil and coal, something pretty much every country is pursuing, especially the US. Aside from the fantastic environmental benefits of gas over oil (discussed below), the fact that oil wells are quite non-evasive (and hardly leave any trace at all once decommissioned) should help ease some of the Mongol herding population's worries. Wells are little more than a fenced-in small area of valves and pipes, leaving the landscape effectively unspoilt, so herding can continue uninterrupted, unlike coal mining, which unapologetically strips the landscape. It would also require fewer miners, so the local-outsiders stress would be lightened. So, no real downside there. (Well, except for the water issue, which I'll discuss towards the end.)
2. Gas solves much of China's pollution problems.
Using gas has pretty much no environmental downside given the alternatives, as it produces around 25% less carbon dioxide than petroleum and is shockingly 85% cheaper than oil (although this will fluctuate as drilling and demand increase). While China's demand for oil is skyrocketing (about 15% per year) thanks to its skyrocketing demand for cars (about 23% sales growth per year)(1), this also means its demand for foreign oil and carbon emissions are also skyrocketing. Even with the recent slowdown in car sales, emissions and oil demand are still going through the roof. Well, one of the advantages for China, unlike the US where a mere 3% of natural gas is making it to vehicles (2), China's car purchasers aren't buying a new car to replace a car they already have, but instead buying their first car. This means the car-buying decision doesn't include the option of just keeping the old one and driving it a bit longer. For America to switch to electric or natural gas-burning vehicles, we must replace all the cars being driven everyday and get everyone in the market for used cars (like myself), to buy a new car instead. That drastically increases the cost of a "new" car, as a used car, on average, costs less than half the cost of a brand new car, according to bankrate.com (not to mentioned effectively killing a huge industry). But China doesn't have this problem, as it doesn't have much of a used car industry to begin with. So not only would natural gas be relatively easy to implement in the car industry (with some careful strategy and planning), it would decrease monetary and environmental costs related to the entire energy industry, shrinking the carbon footprint created by coal and oil.
3. Gas would make the world like China more.
I'm personally of the opinion that the world's problem with China is a bit childish. Regardless, it exists, and America, in particular, isn't particularly pleased with China's trade balance. Fantastically, gas could help ease some of these problems, too! Glory, glory, hallelujah! China has loads of shale beds, the deposits drilled into to withdraw natural gas, spread out all through the northern and western portions of the country (these are the same beds where much of the coal is located). The IEA estimated the country's total recoverable resources at 50tcm (3), almost 6 times America's 8.5tcm (4), so it's not exactly hurting for resources. The government has also committed to pushing for an increase from 4% to 8% share of China's primary-energy consumption. (5) Even though that's a lot less than most rich countries where gas makes up at least a quarter of the total energy mix, that's a huge shift for the global industry. A shift of one percentage point in China's consumption is roughly equal to 25bcm a year, which is about half of Qatar's annual output. (3) Qatar is the world's biggest exporter of gas. Is the gravity of this making any impact yet? Because of China's differing geology from America's, China's complete lack of infrastructure and the distance of the shale beds from water, an important input for fracking, getting to the point where China can sustain itself on gas could take a while. (Right now, different Chinese energy firms are investing in other international firms in attempts to gain expertise in the field.) That means massive imports. That'll drive down China's trade surplus, so politicians like Romney should be happy. Very happy.
So in the end, China is making the move toward cleaner energy, for economic, political and environmental reasons. Whatever the reasons, it's for the best, as making the change to natural gas has pretty much no real downside aside from the amount of time it will take to make it happen. I, for one, look forward to being able to breathe with my windows open when I visit.
(1: "China May car sales up 22.6 percent year-on-year", Reuters, http://www.reuters.com/article/2012/06/09/us-china-autos-idUSBRE85803C20120609)
(2: "Gas works", The Economist, July 14th edition)
(3: "A world of plenty", The Economist, July 14th edition)
(4: "Natural gas reserves", ClearOnMoney, http://www.clearonmoney.com/dw/doku.php?id=public:natural_gas_reserves)
(5: China's 12th 5-year-plan, translated by APCO Worldwide, http://www.apcoworldwide.com/content/pdfs/chinas_12th_five-year_plan.pdf)
