[Like the United States and Europe, China wants to wean itself from its dependence on energy imports — and in Jiaoshizhen, the Chinese energy giant Sinopec says it has made the country’s first commercially viable shale gas discovery. Its efforts could also help address another urgent issue, as Beijing looks to curb an overwhelming reliance on coal that has blackened skies and made China the largest contributor to global warming.]
By Keith Bradsher
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Credit Jonah M. Kessel for The New York Times
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JIAOSHIZHEN, China — Residents of this
isolated mountain valley of terraced cornfields were just going to sleep last
April when they were jolted by an enormous roar, followed by a tower of flames.
A shock wave rolled across the valley, rattling windows in farmhouses and
village shops, and a mysterious, pungent gas swiftly pervaded homes.
“It was so scary —
everyone who had a car fled the village and the rest of us without cars just
stayed and waited to die,” said Zhang Mengsu, a hardware store owner.
All too quickly,
residents realized the source of the midnight fireball: a shale gas drilling
rig in their tiny rural hamlet.
This verdant valley
represents the latest frontier in the worldwide hunt for shale gas retrievable
by the technology of hydraulic fracturing, or fracking. It is a drilling boom
that has upended the energy industry and spurred billions of dollars of
investment.
Like the United
States and Europe, China wants
to wean itself from its dependence on energy imports — and in Jiaoshizhen, the
Chinese energy giant Sinopec says it has made the country’s first commercially
viable shale gas discovery. Its efforts could also help address another urgent
issue, as Beijing looks to curb an overwhelming reliance on coal that has
blackened skies and made China the largest contributor to global warming.
But the path to
energy independence and a cleaner fossil fuel is fraught with potential
pitfalls. Threats to workplace safety, public health and the environment all
loom large in the shale gas debate — and the question is whether those
short-term risks threaten to undermine China’s long-term goal.
The energy industry
around the world has faced criticism about the economic viability of vast shale
projects and the environmental impact of the fracking process. But interviews
with residents of six hamlets here where drilling is being done, as well as
with executives and experts in Beijing, the United States and Europe, suggest that
China’s search poses even greater challenges.
In China, companies
must drill two to three times as deep as in the United States, making the
process significantly more expensive, noisier and potentially more dangerous.
Chinese energy giants also operate in strict secrecy; they rarely engage with
local communities, and accidents claim a high death toll.
The still-disputed
incident in Jiaoshizhen has raised serious concerns among its residents.
Villagers said that
employees at the time told them that eight workers died when the rig exploded
that night. Sinopec officials and village leaders then ordered residents not to
discuss the event, according to the villagers. Now villagers complain of fouled
streams and polluted fields.
“There was a huge
ball of fire,” said Liu Jiazhen, a mustard greens farmer with three children
who lives a five-minute walk from the site. “The managers here all raced for
their lives up the hill.”
Ms. Liu said that the
flames rose higher than the pines on a nearby ridge, covering the steel frame
of the rig, which is nearly 100 feet high. The flames burned for hours, she
said.
Sinopec describes the
incident as a controlled flaring of gas and denies that anybody died. While the
company would not speak in detail about its shale projects, Sinopec said it ran
its operations safely and without harm to the environment.
Li Chunguang, the
president of Sinopec, said in an interview in late March that nothing had gone
wrong in Jiaoshizhen. “There is no basis for this,” he said.
The bustling activity
in Jiaoshizhen indicates a significant find for Sinopec.
Feeder pipes connect
some of the dozen or so drilling sites, and 100 more wells are planned. Bright
blue, boxy equipment for gas compression is being installed on large, flat lots
next to at least two of the drilling rigs. A two-lane road has been paved
across a mountain pass from Fuling, the nearest city, to help carry the 1,100
truckloads of steel, cement and other supplies needed for each well.
The valley has been
so isolated for centuries that residents of its 16 hamlets still speak a
dialect that is distinct even from Fuling, 13 miles away. Jiaoshizhen had only
two-story concrete buildings and single-story mud brick farmhouses last August;
Sinopec workers lived in trailers while managers rented the upstairs of
concrete homes. On a visit six months later, at least 20 tower cranes were
erecting high-rises.
The gas field in
Jiaoshizhen “is the closest we have in China to a breakthrough project,” said
Gavin Thompson, the head of Asia and Pacific gas and power research at Wood
Mackenzie, one of the largest energy consulting companies. He noted, however,
that Sinopec was providing few details and that he, like most Western experts,
had not been able to visit the valley.
Chris Faulkner, the
chief executive and president of Breitling Energy, a Dallas company that has
advised Sinopec on its drilling in western China for four years, said that the
energy giants’ reluctance to have open discussions about health, safety and
environmental issues might prompt communities to fear the worst.
“If they think that
they’re going to go out and drill 1,000 wells, and no one is going to Google
‘fracking,’ they’re fools,” he said, adding that even in China, “the days of
‘shut up and be quiet’ are gone.”
The Chinese energy giants
have plenty of money to fund their efforts. Sinopec has one million employees
and is the world’s fourth-largest company by revenue after Royal Dutch Shell,
Walmart and Exxon Mobil; the fifth-largest is China National Petroleum. With
their deep pockets, the companies have been investing heavily in North American
shale businesses; Sinopec paid $2.2 billion in 2012 for a 30 percent stake in
Devon Energy’s shale gas and oil operations
in the United States.
In China, workplace
safety is a significant concern. Thousands die each year in coal mines,
according to government statistics that have prompted a successful national
crackdown over the last decade.
Scant information is
publicly available about the safety and environmental records of the
politically powerful, mostly state-owned oil and gas industry. But Sinopec has
acknowledged two deadly accidents in the last year, albeit not related to
fracking. An oil pipeline explosion in Qingdao killed 62 and injured 136, and a
cooking gas explosion in Dongguan killed one.
In Jiaoshizhen, after
the blast, worries linger about the impact on the residents’ health and their
fields.
Villagers said in
interviews in August and February that the fast-spreading gas they encountered
last year had been foul-smelling. Sinopec said that it had done air tests and
not found any toxic pollution, although it declined to identify the gas.
The gas evoked
particular fear here because drilling by China National Petroleum in 2003 about
120 miles to the northeast released toxic gases that killed 243 people and
sickened thousands. That accident involved conventional gas exploration,
however, not fracking.
Residents here also
worry about diesel runoff from the drilling sites, tainting local streams and
at least one shallow well. The drilling “makes so much noise and the water that
comes down the mountain has become so much dirtier to drink; now it smells of
diesel,” said Tian Shiao Yung, a farmer.
Sinopec said that it
temporarily provided drinking water to residents after drilling foam surfaced
in a nearby cave last spring, and it changed its drilling practice. The company
said that subsequent tests had shown the local water to be “drinkable.”
Despite her
complaints, Ms. Tian, like every other resident interviewed, welcomed the
drilling for one reason: money.
Sinopec rents land
from farmers for 9,000 renminbi, or $1,475, per acre each year. Farmers earn
that much money from growing crops only in the best years, and then after
hundreds of hours of labor.
“Farmers don’t mind;
now they can buy their rice instead of having to grow it,” Ms. Tian said,
adding: “I’m still drinking the water.”
