China is putting all the cards on the table to reduce emissions with natural gas, but their demand is much higher than their production capacity.
China is the world’s largest emissions contributor. Images of smog clouding the daily lives of Chinese citizens have become a common scene in the country. It’s a very dreary view as people must walk about their day wearing a facemask – almost as if it has turned into a Chinese OSHA Requirement.
This is not a scene China wants to come to mind when you think of the Red Dragon country and they are looking to clear the air. Despite their super-low-cost solar panels, they are not looking to renewables to produce clean energy and to power their heavy industries; they are looking at natural gas as it is cheap, efficient, and clean.
Last year, we covered how the US and China reached a trade deal on liquified natural gas, LNG. The $26 billion per year deal solidified our LNG export capacity to key Asian markets. The significance of the Chinese LNG deal for the US is their new ability to negotiate directly with American suppliers; however, our LNG is a drop in the bucket for their demands. It is only 7% of their demand! China is putting all the card on the table while betting on natural gas. They have reached enormous other deals with Russia, including a direct pipeline from the Kremlin as part of their $400 billion energy pact.