Massive energy source remains untapped

Shale gas extraction refers to the extraction of natural gas trapped in shale rock. While traditional extraction of natural gas has a long history in China, drilling for shale gas is relatively new and China's technological know-how lags behind many other countries.

At the on-going China Mining Exhibition, experts are debating just how China should develop its massive reserves of shale gas.

China has an estimated 25 trillion cubic feet of shale gas reserves, but only around a hundred shale gas wells. Experts and think tanks are trying to change that.

China Energy Net Consulting has been doing research on policy making, mineral rights and market development in exploring shale gas.

"Mining shale gas is in its very primitive stage in China.China has a very small number of shale gas wells. For commercialization of shale gas, more wells are needed to lower the cost, which is an inevitable process," said Li Boshu, project manager of China Energy Net Consluting.

Li also points out, shale gas is important to China's energy structure reform. It is also expected to play an important part in China's position in international energy cooperation.

"The biggest difficulty is in the management mechanism, such as open and clear mineral rights and bidding processes. Also, we need to find more creative ways of financial and policy support... It will be a big boost for public confidence if we strengthen supervision in the very beginning of shale gas mining," said Li.

The US is currently the world’s leading shale gas miner. Cooperation between China and the United States is increasing. But experts also warn that China should pay attention to risks as well.

"The positive and negative sides," said Alvin Lin, project attorney of natural resources defence council.

The possibilities for shale gas exploration are immense. More and more companies are showing interest in the area. Many also believe allowing more civil funds to enter the energy market will be an important element in the reform of China's energy structure.

China is facing a dilemma. Depending too much on coal and fossil oil has cause huge impact on environment. In the meantime, the need for natural gas is rising rapidly. Mining shale gas now has direct influences on energy strategy and safety.