IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v153y2021ics0301421521001221.html
   My bibliography  Save this article

Subsidy analysis and development trend forecast of China's unconventional natural gas under the new unconventional gas subsidy policy

Author

Listed:
  • Liu, Jianye
  • Li, Zuxin
  • Duan, Xuqiang
  • Luo, Dongkun
  • Zhao, Xu
  • Liu, Ruolei

Abstract

In June 2019, China significantly changed its unconventional natural gas subsidy policy, changing the subsidy mode from a comprehensive quota standard mode to a competitive mode, aiming to reduce its subsidy pressure and channel subsidies to specific projects that are needed to increase annual and winter electricity production. Through a brief introduction of China's cleaner energy goals and a comparative analysis of the new and old subsidy policies, the orientations and impacts of the new policy are interpreted. By comparing the changes in subsidy quota, production and price of three kinds of unconventional natural gas (shale gas, tight gas and CBM) over the past ten years, in combination with the generalized Weng model, the impact of subsidy on unconventional natural gas production is quantified. The development trend of unconventional natural gas under the new policy is forecasted on the premise that the total amount of subsidy and sales price remain unchanged.. The sensitivity of three kinds of unconventional natural gas to different subsidies is analyzed. The impact of the new policy on the change in gas production curve is illustrated after comparing the optimal production plans for typical shale gas wells under the new and old policies. The results show that shale gas and CBM may be negatively affected, while the development of tight gas may be promoted; in the future, tight gas and shale gas will dominate, while the development of CBM will be tough. The new policy will stimulate the production enterprises to adopt the plan of high initial production and high decline rate, which may lead to a reduction in total gas production and resources utilization efficiency.

Suggested Citation

  • Liu, Jianye & Li, Zuxin & Duan, Xuqiang & Luo, Dongkun & Zhao, Xu & Liu, Ruolei, 2021. "Subsidy analysis and development trend forecast of China's unconventional natural gas under the new unconventional gas subsidy policy," Energy Policy, Elsevier, vol. 153(C).
    • Handle: RePEc:eee:enepol:v:153:y:2021:i:c:s0301421521001221
    DOI: 10.1016/j.enpol.2021.112253
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421521001221
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2021.112253?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Luo, Dongkun & Dai, Youjin, 2009. "Economic evaluation of coalbed methane production in China," Energy Policy, Elsevier, vol. 37(10), pages 3883-3889, October.
    2. Yuan, Jiehui & Luo, Dongkun & Xia, Liangyu & Feng, Lianyong, 2015. "Policy recommendations to promote shale gas development in China based on a technical and economic evaluation," Energy Policy, Elsevier, vol. 85(C), pages 194-206.
    3. Hua, Yaping & Oliphant, Monica & Hu, Eric Jing, 2016. "Development of renewable energy in Australia and China: A comparison of policies and status," Renewable Energy, Elsevier, vol. 85(C), pages 1044-1051.
    4. Luo, D.K. & Dai, Y.J. & Xia, L.Y., 2011. "Economic evaluation based policy analysis for coalbed methane industry in China," Energy, Elsevier, vol. 36(1), pages 360-368.
    5. Ronald Steenblik, 2017. "Analysing oil-production subsidies," Nature Energy, Nature, vol. 2(11), pages 838-839, November.
    6. Zhao, Xu & Luo, Dongkun & Lu, Kun & Wang, Xiaoyu & Dahl, Carol, 2019. "How the removal of producer subsidies influences oil and gas extraction: A case study in the Gulf of Mexico," Energy, Elsevier, vol. 166(C), pages 1000-1012.
    7. Yuan, Jiehui & Luo, Dongkun & Feng, Lianyong, 2015. "A review of the technical and economic evaluation techniques for shale gas development," Applied Energy, Elsevier, vol. 148(C), pages 49-65.
    8. Zhao, Xu & Dahl, Carol A. & Luo, Dongkun, 2019. "How OECD countries subsidize oil and natural gas producers and modeling the consequences: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 104(C), pages 111-126.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fan, Lurong & Wang, Binyu & Song, Xiaoling, 2023. "An authority-enterprise equilibrium differentiated subsidy mechanism for promoting coalbed methane extraction in multiple coal seams," Energy, Elsevier, vol. 263(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Jianye & Li, Zuxin & Luo, Dongkun & Duan, Xuqiang & Liu, Ruolei, 2020. "Shale gas production in China: A regional analysis of subsidies and suggestions for policy," Utilities Policy, Elsevier, vol. 67(C).
    2. Xiaoqian Guo & Qiang Yan & Anjian Wang, 2017. "Assessment of Methods for Forecasting Shale Gas Supply in China Based on Economic Considerations," Energies, MDPI, vol. 10(11), pages 1-14, October.
    3. Niu, Wente & Lu, Jialiang & Sun, Yuping & Zhang, Xiaowei & Li, Qiaojing & Cao, Xu & Liang, Pingping & Zhan, Hongming, 2024. "Techno-economic integration evaluation in shale gas development based on ensemble learning," Applied Energy, Elsevier, vol. 357(C).
    4. Fan, Lurong & Xu, Jiuping, 2020. "Authority–enterprise equilibrium based mixed subsidy mechanism for carbon reduction and energy utilization in the coalbed methane industry," Energy Policy, Elsevier, vol. 147(C).
    5. Hamawand, Ihsan & Yusaf, Talal & Hamawand, Sara G., 2013. "Coal seam gas and associated water: A review paper," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 550-560.
    6. Shouqing Lu & Yuanping Cheng & Jinmin Ma & Yuebing Zhang, 2014. "Application of in-seam directional drilling technology for gas drainage with benefits to gas outburst control and greenhouse gas reductions in Daning coal mine, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 73(3), pages 1419-1437, September.
    7. Fan, Lurong & Ma, Ning & Zhang, Wen, 2023. "Multi-stakeholder equilibrium-based subsidy allocation mechanism for promoting coalbed methane scale extraction-utilization," Energy, Elsevier, vol. 277(C).
    8. Liu, Haomin & Zhang, Zaixu & Zhang, Tao, 2022. "Shale gas investment decision-making: Green and efficient development under market, technology and environment uncertainties," Applied Energy, Elsevier, vol. 306(PA).
    9. Grecu, Eugenia & Aceleanu, Mirela Ionela & Albulescu, Claudiu Tiberiu, 2018. "The economic, social and environmental impact of shale gas exploitation in Romania: A cost-benefit analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 93(C), pages 691-700.
    10. Liu, Hailiang & Andresen, Gorm Bruun & Greiner, Martin, 2018. "Cost-optimal design of a simplified highly renewable Chinese electricity network," Energy, Elsevier, vol. 147(C), pages 534-546.
    11. Hosseini, Seyed Ehsan & Wahid, Mazlan Abdul, 2014. "Development of biogas combustion in combined heat and power generation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 868-875.
    12. Li, B. & Zhou, D.L. & Wang, Y. & Shuai, Y. & Liu, Q.Z. & Cai, W.H., 2020. "The design of a small lab-scale wind turbine model with high performance similarity to its utility-scale prototype," Renewable Energy, Elsevier, vol. 149(C), pages 435-444.
    13. Zhou, Junping & Tian, Shifeng & Zhou, Lei & Xian, Xuefu & Yang, Kang & Jiang, Yongdong & Zhang, Chengpeng & Guo, Yaowen, 2020. "Experimental investigation on the influence of sub- and super-critical CO2 saturation time on the permeability of fractured shale," Energy, Elsevier, vol. 191(C).
    14. Xuhua Gao & Junhong Yu & Xinchun Shang & Weiyao Zhu, 2023. "Investigation on Nonlinear Behaviors of Seepage in Deep Shale Gas Reservoir with Viscoelasticity," Energies, MDPI, vol. 16(17), pages 1-23, August.
    15. M. Hasanuzzaman & Ummu Salamah Zubir & Nur Iqtiyani Ilham & Hang Seng Che, 2017. "Global electricity demand, generation, grid system, and renewable energy polices: a review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 6(3), May.
    16. Lee, Boreum & Lim, Dongjun & Lee, Hyunjun & Byun, Manhee & Lim, Hankwon, 2021. "Techno-economic analysis of H2 energy storage system based on renewable energy certificate," Renewable Energy, Elsevier, vol. 167(C), pages 91-98.
    17. Wang, Ziwei & Qin, Yong & Shen, Jian & Li, Teng & Zhang, Xiaoyang & Cai, Ying, 2022. "A novel permeability prediction model for coal based on dynamic transformation of pores in multiple scales," Energy, Elsevier, vol. 257(C).
    18. Nur Izzah Hamna A. Aziz & Marlia M. Hanafiah & Shabbir H. Gheewala & Haikal Ismail, 2020. "Bioenergy for a Cleaner Future: A Case Study of Sustainable Biogas Supply Chain in the Malaysian Energy Sector," Sustainability, MDPI, vol. 12(8), pages 1-24, April.
    19. Hamid R. Khosravani & María Del Mar Castilla & Manuel Berenguel & Antonio E. Ruano & Pedro M. Ferreira, 2016. "A Comparison of Energy Consumption Prediction Models Based on Neural Networks of a Bioclimatic Building," Energies, MDPI, vol. 9(1), pages 1-24, January.
    20. Jin, Xu & Wang, Xiaoqi & Yan, Weipeng & Meng, Siwei & Liu, Xiaodan & Jiao, Hang & Su, Ling & Zhu, Rukai & Liu, He & Li, Jianming, 2019. "Exploration and casting of large scale microscopic pathways for shale using electrodeposition," Applied Energy, Elsevier, vol. 247(C), pages 32-39.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:153:y:2021:i:c:s0301421521001221. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.