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March 26, 2014
Article Co-Authored by Yingxia Yang on Impact of U.S. Shale Gas Revolution on China’s Energy Security Published in Oxford Energy Forum

An article co-authored by Brattle associate Yingxia Yang that assesses how a boom in the U.S. shale gas supply can help alleviate concerns over energy security in China has been published in Issue 95 of the Oxford Energy Forum. The article, “The Impacts of U.S. Shale Gas Revolution on China’s National Energy Security,” is co-authored by Hengwei Liu and examines how a shift in China’s energy supply from coal to natural gas raises a concern for national energy security, and how U.S. shale gas export may help to lessen this concern.

Because domestic natural gas production cannot meet the increasing demand for clean energy, natural gas imports have increased more than 10 times from 2007 to 2012. The Atmospheric Pollution Prevention Action Plan, released in 2013 by China’s State Council, calls for natural gas to replace coal in supplying energy to remedy the severe air pollution problem the nation currently faces, which will further increase the need for natural gas imports.

An increased dependence on foreign imports has raised concerns for the country’s energy security from a traditional standpoint – the more a country relies on foreign imports, the less secure its energy supply is. The authors point out, however, that this view ignores other dimensions of energy security, such as diversification of energy supply channels and the pricing mechanism. They argue that improving energy security requires a global disposition and it is unrealistic to achieve national energy security without relying on foreign resources.

The article points to the shale gas revolution in the U.S. and how it can help the diversification of China’s LNG import sources by providing geographical diversification to reduce the risk of imports, thereby improving energy security. The authors also mention that North American exports may put downward pressure on the natural gas market price, which China can benefit from whether it imports from the U.S. directly or indirectly.