iht 2017-12-12 natural gas in Chinese winter
https://www.nytimes.com/2017/12/12/business/energy-environment/china-gas-coal.html
Energy & Environment
Shivering Children, Pricier Spandex: The Impact of China's Energy Stumble
By KEITH BRADSHERDEC. 12, 2017
A natural gas processing plant in Sulige, Inner Mongolia, in 2013.
China's shift to natural gas from coal has not gone according to plan.
Credit Chen Aizhu/Reuters
BEIJING -- Homes, businesses and even hospitals across northern China are
running short of natural gas. Some schoolchildren are shivering. And in
the chemical industry -- well, the spandex supply is getting tight.
More than a decade ago, China began moving gradually to rely more on
natural gas and less on coal, a dirtier form of energy. This autumn,
faced with public pressure to clean smoggy skies, the government decided
to pick up the pace.
In some places, that shift has gone awry.
The Chinese government on Tuesday shut down big chemical factories in
western China for as long as four months to free up natural gas to heat
homes and schools. And in Beijing, the city authorities have very
publicly reversed a heavily promoted policy of ending municipal coal use.
The city has turned a big coal-fired power plant in its southeastern
suburbs back on -- in the chilly air, it releases a towering, gray cloud
of steam and pollution visible from tall buildings across much of the
city.
"It is the most severe shortfall of natural gas since the commitment to
build up gas demand," said Daniel Yergin, the energy consultant and
author, who is visiting Beijing this week.
The disruptions so far appear temporary. But they show how painful and
expensive it will be for China to clean up its air and wean itself from
dirty-burning coal. The fossil fuel helped propel the country's economy
to become the world's second-largest, and efforts to break its coal
addiction could have global, as well as national, consequences.
The Chinese government is trying to reduce air pollution by 15 percent
this winter in much of northern China, where pollution tends to be the
country's worst, particularly during colder months when coal is widely
burned for heat.
Through the autumn, government inspectors did not just order schools,
businesses and homes to shut down coal-fired stoves and boilers and
switch to natural gas. They made sure that their orders would not be
defied, dismantling and removing large numbers of coal-fired devices,
according to state-controlled media.
Winter has arrived early, however, and it has been especially cold this
year, triggering unexpectedly high demand for heating. At the same time,
natural gas has been in short supply, and in some cases construction has
not been completed on the pipelines needed to deliver it.
The result has been a national outcry, particularly after the official
newspaper People's Daily published photos last week of elementary school
students having classes outdoors in subfreezing weather because it was
even colder indoors.
"In the past, the heating problems had occurred, but this year the issue
is particularly severe because the supply side has not caught up," said
Lin Boqiang, an energy analyst at Xiamen University. "In planning the
emissions goals, the government has not really coordinated well with gas
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China already consumes considerably more natural gas than it produces,
importing the difference. The country also regulates the price at which
state-controlled energy giants are allowed to sell natural gas, to
encourage its domestic use as a cleaner-burning substitute for coal.
Keeping prices low, though, has meant that energy companies have had
little incentive to produce or import more natural gas. PetroChina, the
main oil and gas company in northern China, reported that its losses from
natural gas climbed steeply in the first three quarters of this year
compared with the same period in 2016.
Yet there is one big exception in consumer prices for natural gas in
China: the compressed natural gas burned by many taxis in big Chinese
cities, and by a growing number of trucks as well. Compressed natural gas
prices have surged 65 percent since early November, prompting government
officials to warn last week against price gouging.
The timing of China's revival of coal consumption this week is awkward:
Officials have been promoting their country's efforts to control global
warming in international talks this month in Europe. China's
planet-warming greenhouse gas emissions have risen sharply over the past
decade, but it has also shown much more of a willingness than the Trump
administration to talk about ways to curb that growth in the future.
The natural gas shortage has particularly hit the chemicals industry in
China, with consequences for the wider world.
BASF, the German chemicals giant, announced on Tuesday that a gas
shortage had prompted it to invoke force majeure to break delivery
contracts from its huge complex in Chongqing, in western China. That
factory alone manufactures more than 5 percent of the world's supply of a
chemical, known as MDI, that is used to make spandex as well as
insulation for refrigerators, cars and houses.
While MDI factories outside China mainly produce the chemical for
insulation, China dominates global production of garments made from
spandex, the stretchy material best known in the United States under the
Lycra brand name. The BASF shutdown may drive MDI prices even higher.
That will make spandex garments more expensive, but should not result in
their disappearance from store shelves, chemicals analysts said.
And while Chinese environmentalists have led the push for using more
natural gas and less coal, even they now say the government may have
moved too fast.
"The problem is not about what they are doing, but whether you can
achieve the goal in a short period of time," said Ma Jun, the director of
the Institute of Public and Environmental Affairs, a nonprofit group in
Beijing that monitors pollution. "The officials are ill prepared, and
there has been a lack of discussion on execution."
Ailin Tang and Owen Guo contributed research.
A version of this article appears in print on December 13, 2017, on Page B2 of the New York edition with the headline: Even Spandex Is Hit By an Energy Squeeze.