The Chinese Are Obsessing Over America's Shale Revolution

Fracking

Photo: Jeremy Buckingham MLC via flickr

Daniel Yergin, energy analyst and Pulitzer Prize-winning author, told Bloomberg’s Tom Keene yesterday that the Chinese are obsessing over the shale hydrocarbon revolution that’s spread across the U.S.But not necessarily for the reason you think.

As it turns out, as lofty as estimates of America’s shale reserves have been, they remain one notch behind China’s — as this table from Deutsche Bank shows:

shale

Photo: Deutsche Bank

Yergin was asked by economist Stephen Roach about how China will meet its growing energy needs, given that country’s shift toward greater domestic consumption.

He responded:

I think they are very preoccupied with meeting their energy needs. And as they shift towards a more consumer-oriented culture, they shift towards automobiles, and so how they’re going to meet future demand is very important to them.

I was struck by how interested they are and how carefully they’re following what’s happening in U.S. shale gas. First becuase they see it has enhancing the U.S.’s division of the global economy. And second, the question they’re asking themselves: if their resources are geologically larger than the United States, how long it will take them to develop shale gas. And the number I kept hearing: five to 10 years.

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