A Comparison Between Shale Gas in China and Unconventional Fuel Development in the United States: Health, Water and Environmental Risks

Paolo D. Farah and Riccardo Tremolada
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Paolo D. Farah: Edge Hill University, Department of Law & Criminology, UK, gLAWcal, Global Law Initiatives for Sustainable Development, UK
Riccardo Tremolada: Università degli Studi del Piemonte Orientale, Dipartimento di Studi per l’Impresa e il Territorio, Italy, EU Commission Marie Curie Fellow (2013), Chinese Research Academy on Environmental Sciences (CRAES), China, J.D. and LL.M. Università degli Studi di Milano, School of Law, Italy

No 2013.95, Working Papers from Fondazione Eni Enrico Mattei

Abstract: China is appraised to have the world's largest exploitable reserves of shale gas, although several legal, regulatory, environmental and investment-related issues will likely restrain its scope. China's capacity to successfully face these hurdles and produce commercial shale gas will have a crucial impact on the regional gas market and on China’s energy mix, as Beijing strives to decrease reliance on imported oil and coal, while attempting to meet growing energy demand and maintain a certain level of resource autonomy. The development of the unconventional natural gas extractive industry will also endow China with further negotiating power to obtain more advantageous prices from Russia and future liquefied natural gas (LNG) suppliers. This paper, adopting a comparative perspective, underlines the trends learned from unconventional fuel development in the United States, emphasizing their potential application to the Chinese context in light of recently signed production-sharing contracts between qualified foreign investors and China. The wide range of regulatory and enforcement problems in this matter are accrued by an extremely limited liberalization of gas prices, lack of technological development, and political hurdles curbing the opening of resource extraction to private investors. These issues are exacerbated by concerns related to the risk of water pollution deriving from mismanaged drilling and fracturing, absence of adequate regulation framework and industry standards, entailing consequences on social stability and environmental degradation.

Keywords: Shale Gas; Unconventional Fuel; China; U.S.A.; Health; Water; Environmental Risks (search for similar items in EconPapers)
JEL-codes: A12 A13 D40 D62 D81 F1 F10 F13 F18 F40 H23 K32 K33 L95 Q25 Q3 Q30 Q32 Q33 Q4 Q40 Q41 Q42 Q43 Q48 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-cis, nep-cwa, nep-ene, nep-env and nep-res
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Citations: View citations in EconPapers (1)

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