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Economic evaluation based policy analysis for coalbed methane industry in China

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  • Luo, D.K.
  • Dai, Y.J.
  • Xia, L.Y.

Abstract

Coalbed methane (CBM) is a kind of unconventional natural gas. China has abundant CBM resource and its CBM industry is expected to prosper in the future. However, China’s currently imperfect CBM industry policy still needs to be further improved to support the sustainable development of CBM industry. To provide recommendations for policy makers, economic evaluation is conducted to find out the overall economic viability of China’s CBM resource and the factors with most impact on the economic viability of CBM resource. The results show that there is still about 42% of China’s CBM resource uneconomic to develop under current industry policy and that the three factors with most impact on the economic viability of CBM resource are CBM price, production rate and operating costs. And then, policy scenario analysis is conducted to test the validity of major policies and find out the impact of different policies under different scenarios on the profitability of CBM recourse. The results demonstrate that value-added tax (VAT) reimbursement policy, financial subsidy policy and corporate income tax exemption policy are effective to improve the economic viability of CBM recourse. According to these results, some pointed recommendations on CBM industry policy are put forward.

Suggested Citation

  • Luo, D.K. & Dai, Y.J. & Xia, L.Y., 2011. "Economic evaluation based policy analysis for coalbed methane industry in China," Energy, Elsevier, vol. 36(1), pages 360-368.
    • Handle: RePEc:eee:energy:v:36:y:2011:i:1:p:360-368
    DOI: 10.1016/j.energy.2010.10.031
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    4. Yang, Ruiyue & Hong, Chunyang & Huang, Zhongwei & Song, Xianzhi & Zhang, Shikun & Wen, Haitao, 2019. "Coal breakage using abrasive liquid nitrogen jet and its implications for coalbed methane recovery," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    5. Guo, Zixi & Zhao, Jinzhou & You, Zhenjiang & Li, Yongming & Zhang, Shu & Chen, Yiyu, 2021. "Prediction of coalbed methane production based on deep learning," Energy, Elsevier, vol. 230(C).
    6. Wang, Ziwei & Qin, Yong & Shen, Jian & Li, Teng & Zhang, Xiaoyang & Cai, Ying, 2022. "A novel permeability prediction model for coal based on dynamic transformation of pores in multiple scales," Energy, Elsevier, vol. 257(C).
    7. Liu, Yong & Deng, Yujie & Zhang, Huidong & Li, Haichao & Chen, Changjiang & Gao, Mengya & Jing, Gangxia, 2025. "Study on the evolution law of the vortical structure inside of oscillation chamber of self-excited oscillation pulsed supercritical carbon dioxide jet (SEOP SC-CO2 jet) and its influence on pulsed characteristics," Energy, Elsevier, vol. 314(C).
    8. Wang, Ting & Lin, Boqiang, 2014. "Impacts of unconventional gas development on China׳s natural gas production and import," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 546-554.
    9. Liu, Huihu & Sang, Shuxun & Wang, Geoff G.X. & Li, Yangmin & Li, Mengxi & Liu, Shiqi, 2012. "Evaluation of the synergetic gas-enrichment and higher-permeability regions for coalbed methane recovery with a fuzzy model," Energy, Elsevier, vol. 39(1), pages 426-439.
    10. Zhang, Baoxin & Deng, Ze & Fu, Xuehai & Yu, Kun & Zeng, Fanhua (Bill), 2023. "An experimental study on the effects of acidization on coal permeability: Implications for the enhancement of coalbed methane production," Energy, Elsevier, vol. 280(C).
    11. Min, Chao & Wen, Guoquan & Gou, Liangjie & Li, Xiaogang & Yang, Zhaozhong, 2023. "Interpretability and causal discovery of the machine learning models to predict the production of CBM wells after hydraulic fracturing," Energy, Elsevier, vol. 285(C).
    12. Shiqun Li & Baosheng Zhang, 2016. "Research of Coalbed Methane Development Well-Type Optimization Method Based on Unit Technical Cost," Sustainability, MDPI, vol. 8(9), pages 1-12, August.
    13. Shouqing Lu & Yuanping Cheng & Jinmin Ma & Yuebing Zhang, 2014. "Application of in-seam directional drilling technology for gas drainage with benefits to gas outburst control and greenhouse gas reductions in Daning coal mine, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 73(3), pages 1419-1437, September.
    14. Fan, Lurong & Ma, Ning & Zhang, Wen, 2023. "Multi-stakeholder equilibrium-based subsidy allocation mechanism for promoting coalbed methane scale extraction-utilization," Energy, Elsevier, vol. 277(C).
    15. Liu, Jianye & Li, Zuxin & Duan, Xuqiang & Luo, Dongkun & Zhao, Xu & Liu, Ruolei, 2021. "Subsidy analysis and development trend forecast of China's unconventional natural gas under the new unconventional gas subsidy policy," Energy Policy, Elsevier, vol. 153(C).
    16. Zheng, Shizhuo & Zhang, Xin & Wang, Tao & Liu, Jie, 2015. "An experimental study on premixed laminar and turbulent combustion of synthesized coalbed methane," Energy, Elsevier, vol. 92(P3), pages 355-364.
    17. Tian, Siyu & Qin, Botao & Ma, Dong & Zhou, Qigeng & Luo, Zhongzheng, 2023. "Suppressive effects of alkali metal salt modified dry water material on methane-air explosion," Energy, Elsevier, vol. 285(C).
    18. Yusuf Opeyemi Akinwale & John-Felix Kayode Akinbami, 2016. "Economic Evaluation of Nigerian Marginal Oil and Gas Field using Financial Simulation Analysis," International Journal of Energy Economics and Policy, International Journal of Energy Economics and Policy, vol. 6(3), pages 563-574.
    19. Zhao, Xu & Luo, Dongkun & Xia, Liangyu, 2012. "Modelling optimal production rate with contract effects for international oil development projects," Energy, Elsevier, vol. 45(1), pages 662-668.
    20. Dai, Shijie & Xu, Jiang & Jia, Li & Chen, Jieren & Yan, Fazhi & Chen, Yuexia & Peng, Shoujian, 2023. "On the 3D fluid behavior during CBM coproduction in a multi pressure system: Insights from experimental analysis and mathematical models," Energy, Elsevier, vol. 283(C).
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