The second round of bidding on exploration rights for shale gas blocks, launched in early October, attracted 83 companies, the Ministry of Land and Resources said last Thursday, up dramatically from just six bidders during the first round in June 2011.
Chinese enterprises' growing enthusiasm for shale gas comes in large part from Beijing's efforts to develop clean energy industries aimed at curbing the country's emission of greenhouse gases.
But despite the government's support of the shale gas industry, domestic energy giants should not blindly rush into this sector until the technology is available to deal with the environmental impact of extracting shale gas.
Shale gases are embedded in shale rock formations deep below the earth's surface. These gases are extracted primarily through a process known as hydraulic fracturing, whereby a massive amount of water is pumped into a well and the resulting pressure forces the gas to the surface.
Chinese shale gas explorers have long depended on imported technology from the US, the world's largest share gas producer.
However, in the US, environmentalists and lawmakers are starting to take notice of the environmental damage caused by hydraulic fracturing.
In order to increase efficiency, nearly 600 kinds of chemicals are added to the water used in the shale gas extraction process and over half of these chemicals remain in the soil, where they can then go on to contaminate the ground water. Such a problem, which has caused irreparable ecological harm to some areas already, presents a major stumbling block for the US shale gas industry.
As if this weren't bad enough, according to a report released in April by the United States Geological Survey, regions in the US where shale gas extraction is taking place have seen an increase in the frequency of earthquakes in recent years.
With the possible consequences of hydraulic fracturing so great, it's no wonder that many European countries, including Britain and France, have moved to ban the process.
China is still an emerging economy and cannot afford to take unnecessary risks with either its energy strategy or its environment. Shale gas may help China scale back its use of greenhouse gas-emitting energy sources, but if extracting this resource presents so many dangers, there is no point for Beijing or local enterprises to invest massive amounts of money into an industry which will also degrade the environment.
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