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A Comparison Between Shale Gas in China and Unconventional Fuel Development in the United States: Health, Water and Environmental Risks

Author

Listed:
  • Paolo D. Farah

    (Edge Hill University, Department of Law & Criminology, UK, gLAWcal, Global Law Initiatives for Sustainable Development, UK)

  • Riccardo Tremolada

    (Università degli Studi del Piemonte Orientale, Dipartimento di Studi per l’Impresa e il Territorio, Italy, EU Commission Marie Curie Fellow (2013), Chinese Research Academy on Environmental Sciences (CRAES), China, J.D. and LL.M. Università degli Studi di Milano, School of Law, Italy)

Abstract

China is appraised to have the world's largest exploitable reserves of shale gas, although several legal, regulatory, environmental and investment-related issues will likely restrain its scope. China's capacity to successfully face these hurdles and produce commercial shale gas will have a crucial impact on the regional gas market and on China’s energy mix, as Beijing strives to decrease reliance on imported oil and coal, while attempting to meet growing energy demand and maintain a certain level of resource autonomy. The development of the unconventional natural gas extractive industry will also endow China with further negotiating power to obtain more advantageous prices from Russia and future liquefied natural gas (LNG) suppliers. This paper, adopting a comparative perspective, underlines the trends learned from unconventional fuel development in the United States, emphasizing their potential application to the Chinese context in light of recently signed production-sharing contracts between qualified foreign investors and China. The wide range of regulatory and enforcement problems in this matter are accrued by an extremely limited liberalization of gas prices, lack of technological development, and political hurdles curbing the opening of resource extraction to private investors. These issues are exacerbated by concerns related to the risk of water pollution deriving from mismanaged drilling and fracturing, absence of adequate regulation framework and industry standards, entailing consequences on social stability and environmental degradation.

Suggested Citation

  • Paolo D. Farah & Riccardo Tremolada, 2013. "A Comparison Between Shale Gas in China and Unconventional Fuel Development in the United States: Health, Water and Environmental Risks," Working Papers 2013.95, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2013.95
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    Cited by:

    1. Krupnick, Alan & Wang, Zhongmin & Wang, Yushuang, 2014. "Environmental risks of shale gas development in China," Energy Policy, Elsevier, vol. 75(C), pages 117-125.

    More about this item

    Keywords

    Shale Gas; Unconventional Fuel; China; U.S.A.; Health; Water; Environmental Risks;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F18 - International Economics - - Trade - - - Trade and Environment
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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