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October 17, 2013
Article Co-Authored by Associate Yingxia Yang Discusses Impact of U.S. Shale Gas Revolution on China’s Energy Security

Brattle associate Yingxia Yang has published an article that examines how a shift in China’s energy supply from coal to natural gas raises a concern for national energy security, and how the U.S. shale gas revolution may help to lessen this concern. The article, “The Impacts of U.S. Shale Gas Revolution on China’s National Energy Security,” is co-authored by Hengwei Liu and was recently featured in the China Economic Times.

The Atmospheric Pollution Prevention Action Plan, recently released by China’s State Council, calls for natural gas to replace coal in supplying energy to alleviate the severe air pollution problem the nation currently faces. 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.

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.