Assessment of Methods for Forecasting Shale Gas Supply in China Based on Economic Considerations

Xiaoqian Guo, Qiang Yan and Anjian Wang
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Xiaoqian Guo: MLR Key Laboratory of Metallogeny and Mineral Assessment, Institute of Mineral Resources, China Academy of Geological Science, Beijing 100037, China
Qiang Yan: MLR Key Laboratory of Metallogeny and Mineral Assessment, Institute of Mineral Resources, China Academy of Geological Science, Beijing 100037, China
Anjian Wang: Research Center for Strategy of Global Mineral Resources, Institute of Mineral Resources, China Academy of Geological Science, Beijing 100037, China

Energies, 2017, vol. 10, issue 11, 1-14

Abstract: Shale gas, with its lower carbon content and pollution potential, is the most promising natural gas resource in China. When modeling the shale gas supply in a specific gas field, it is of paramount importance to determine the gas supply under economic considerations. Two common calculation methods are used in China for this purpose: Method 1 (M1) is the breakeven analysis, where the gas supply is based on the relationship between costs and revenues, while Method 2 (M2) is the Geologic Resource Supply-Demand Model, where the supply relies on demand and price scenarios. No comparisons has been made between these two methods. In this study, the Fuling shale gas field in the Sichuan Basin was chosen as a study case to forecast the shale gas supply using these two different methods. A sensitivity analysis was performed to discuss the influencing factors of each method and error measures were used to compare the different shale gas supply values calculated by each method. The results shows that M1 is more sensitive to initial production, while M2 is more sensitive to gas price. In addition, M2 is more feasible for its simplicity and accuracy at high price scenarios and M1 is considered to be reliable for low price scenarios with profit. This study can provide a quick and comprehensive assessment method for the shale gas supply in China.

Keywords: China; shale gas; supply; economic consideration (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2017
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