the pipeline to distribute gas to China, photo courtesy Business Week

reporting from Shanghai, China

If China were the United States, geographically, Shanghai would be Washington DC, though they have little in common culturally. The east side of Shanghai was nothing but rice fields and coking plants until 1994. Today it is a sea of tall beautifully designed businesses and hotels.

Shanghai Coking and Chemical Corporation is located in the Wujing chemical industry area near Huangpu River, Southwest of Shanghai. Coking is a process that allows coal to be burned, turning to coke. Coke, when combined with iron ore makes steel.

Shanghai is powered by The Hong Kong and China Gas Company Limited (Towngas). Today most of Shanghais’ gas supply comes as a by-product from coking, known as “Towngas”, a combination of methane and hydrogen.

For years China has been producing electricity with coal, accounting for almost 30 percent of the world’s total annual coal production and around 25 percent of the world’s annual total coal consumption.

The pollution caused by coking coal placed seven Chinese cities in the World Health Organization’s (WHO) 1998 list of top ten most polluted cities in the world. In an effort to reduce pollution China has legislated to destroy the coking plants in Shanghai and build new factories closer to the steel production, north of Shanghai.

According to Tim Vail, Director of Fuel Cell, General Motors, the Chinese government wants to augment coal with natural gas as a cleaner source of energy. China is currently constructing a West-to-East gas transmission pipeline project. This would allow China to increase their gas consumption.

The gas would be piped in from Western China. China’s strategic thinking is that they would have a secured natural gas supply and a reduction in toxins from coking plants that make steel.

According to the U.S. Department of Energy, in July 2002, construction began on the $18 billion West-East Pipeline (WEP) project, which will bring natural gas from the Tarim basin in the Xinjiang zizhiqu area 4,200 kilometers to Shanghai. The line consists of two sections: the 1,458 kilometer east section links Shanghai with Jingbian, where gas from the Ordos basin will be piped into the pipeline, and the 2,432 kilometer west section, which will connect Jingbian with Lunnan in the Tarim basin. PetroChina plans to complete the east segment in 2004 and the west segment in 2005.

Another major pipeline under construction is a 4,000 kilometer pipeline to transport offshore natural gas production from Hainan Island to supply Guangdong, Fujian and Zhejiang sheng, and Shanghai city. Construction of the pipeline could take as long as 15 years; the pipeline will transport gas, and will most likely lead to a significant increase of recoverable reserves within a decade.

China is realizing what the world is realizing, that our way of life is increasing air pollution and a scarey dependence on oil. The world is sending a great deal of money to countries to keep their habits, their dependencies on oil. While China is catching up quickly, they will need to start spending money for a joint venture to create a new autoworld. This joint venture would allow them to decrease their oil dependence and create a new revenue stream from the creation of hydrogen and fuel cell vehicles.

China has the capabilities and the know how to make hydrogen through coal. If they can find a way to sequester the CO2 from production of coal into hydrogen their current pipelines throughout Shanghai that can carry the hydrogen.

China is not yet beholden to the internal combustion engine. China has recently started setting fuel-economy rules and looking for ways to clean their air and lessen their dependence on oil. China has a program called the 863 program. It is a five year program with a budget of $108 million for electric vehicle research and development.

The Institute of Automobile Electronic Technology is undertaking research under the National 863 program of China. Some of the development issues they are working on are:

  • The Development of the QR Pure Electric Car. Sponsored by the State Key High-tech Research Program (the National 863 Program of China).
  • The Development of the Control System for the multi-powersource powertrain of the Fuel Cell Electric Vehicle (FCEV). Sponsored by the State Key High-tech Research Program (the National 863 Program of China).
  • The Development of Ni-MH Battery and Its Management System for FCEV and QR EV. Sponsored by the State Key High-tech Research Program (the National 863 Program of China).
  • The Development of the the high-pressure common rail fuel injection electronic control diesel engine named YC6112. Cooperated with one factory.
  • If China realizes they don’t need internal combustion engines and partners with the correct companies China can be part of the economic growth that will come from creating an infrastructure, patents, and technologies that are needed to create another source of energy. A source of energy that reduces their dependence on imported oil.


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