China crude oil production declining with no shale oil development
China crude oil production declining with no shale oil development
Although China is one of the major countries that have shale oil reserves, about 48 billion tonnes of her proven reserves have almost not developed yet. Overall Chinese crude oil production with the downward tendency has recorded 29 consecutive months of year-on-year decrease since November 2015, according to the National Bureau of Statistics. The nation’s crude oil demand, however, increased by 13% during the same period. Thus, import dependency is growing to fill the gap between supply and demand. As the declining self-sufficiency is critical, China was unable to include crude oil in the tariff list for retaliate round of the trade war with the U.S.
In July 2018, China produced 3.75 million barrels per day of crude oil, while the General Customs data shows that imports reached 8.5 million bpd in the same period. Imported amount of crude oil was 2.3 times than domestic outputs. The import dependency is extraordinarily high for crude oil among energy supplies in China. Coal production in July was 282 million tonnes compared with 29 million tonnes of imports, and natural gas outputs were 13 billion cubic meters against 1 billion cubic meters of imports. China’s coal and natural gas imports stay at about 10% level of domestic production respectively. However, monthly coal production already has peaked out at around 300 million tonnes, while only the natural gas output is still showing growth.
China is not the only country that is showing a diminution of crude oil production. The upward movement of world crude oil output in the 2010’s is mostly aligned with that in the U.S. It is because of the Shale Revolution, as you know. Even if in the major shale production area, the reduction pace of production in legacy wells is expanding. So that development of new wells is the key factor to boost production. Investments in shale oil/gas development are concentrating in the specific zones like Permian Basin in the U.S. where production costs are the most competitive. It accelerates production efficiency in that areas further and depresses on traditional oil field developments in other regions. Booming shale oil productions in the Permian Basin has caused a lack of transport capacity by pipelines and output was capped as a result.
China has the world third largest shale oil proven reserves and the biggest shale gas proven reserves. However, the majority of these reserves are located in the remote places like Sichuan where developments are quite difficult. There are many issues regarding drilling and transportation. Additionally, large water usage for the Hydraulic fracturing is also an obstacle. Shale oil/gas wells said to require typically from about 10,000 tonnes to 60,000 tonnes or more of water per well depending on each depth. Although China may not need to care about environmental issues that raise counter-movements against shale oil/gas development in the U.S., spending valuable water resources to produce crude oil seems not so reasonable compared to importing crude oil.
The U.S. Energy Information Administration expects that shale oil production in the U.S will maintain growth towards 2030. Crude oil development in China may not be expanded at least until then. Since the country can’t yield more coal as well, the lower energy self-supply could cause arguments. However, we are unable to forecast the future exactly. Before the Shale Revolution, the U.S. was also in similar oil production diminutions as current China. And no one knows how long demand of the fossil fuel in China will continue to enlarge.
★【Sozen Fujiwara】
Research partner、Institute of Economics for Humans
Private investor
Bachelor of Arts, Hiroshima University
Master of Economics, Nihon University
Worked as a reporter for US-based financial media after engaged in futures markets in China and Southeast Asia as a trader. Before that started work experience as a local newspaper reporter.
Immigrated to New Zealand for children’s educational opportunity. Participated in the management of a nutritional product manufacturer that is owned by wife’s family.
Having more than 30 years experience in commodity markets and operating a crude oil market specific blog since 2010: https://ameblo.jp/sozen22/
研究調査等紹介
99%AI寺院
仏教の本流は、その時代、その地域の先端技術との習合です。 宝瑞院はこれまで、WEB3やDAOとの習合を⽬指しておりました。GAFAを倒すのはWEB3やDAOだと私は想定しておりました。 経済評論家・⼤原浩先⽣とは、時 .....
真言宗はApple、天台宗はGoogle
⽇本の仏教は南都六宗(奈良時代:仏教の適⽤範囲と理論)からスタートして、総合 仏教(平安時代:天台宗と真⾔宗:仏教の総合化)、鎌倉仏教(鎌倉時代:修⾏⽅法等の選択)といった歴史を辿ります。 それ以前の南都六宗は真⾔宗に、 .....
⽇本⼈の宗教は曼荼羅密教だ!
「曲学阿世」とは、学を曲げて世に阿(おもね)る姿勢です。 ⾦融引締のような不⼈気な政策は唱える経済学者は少なく、⽿触りの良い⾦融緩和の議論はマスコミでもYou Tubeでも盛り上がります。 仏教の「曲学」はマズいですが、 .....
瞑想は3分でも継続すれば効果がある
【宝瑞院の目指すところ】 宝瑞院は宗教法⼈ですので、収益が⽬的ではありません。 収益活動も永年の仏教信者の浄財が原資、仏教関連の案件に限られます。 株式会社は資本主義や市場経済のフロントランナー、社会への貢献は当 .....