Controversy Analysis - Essay Example

Notably, Zhang (2011) identifies that china sits on the world’s most underdeveloped resource of shale gas. Significantly, China has adopted the above drilling technology in order to replicate US’s victory in utilizing unconventional energy. Considerably, the debate rests on safety and the suitability of the technology in china. That is, whether china has conducted an efficient situational analysis before embarking on fracking process (Zhang 3). It is worthwhile noting that, China hopes that shale gas can change her the same way it has transformed the US boom.

However, currently there is little production commercially; hence, the 6 billion in cubic meters of shale gas target by 2015 seems impossible according to experts. The insufficient experience among some firms in exploiting shale will create a significant challenge to mine the gas. Additionally, if the firms cannot deliver the country has to struggle to diminish its reliance on expensive oil and gas imports. Moreover, the action winner must buy in the proficiency they require; hence, offering the scene of worthwhile contracts for specialist firms for the fracking technology to mine the gas.

Notably, Zhang (2011) identifies that the initial shale auction in the past two years was under the dominance of key state energy firms in china (Zhang 5). The second action witnessed the entrance of myriad firms, a, electric group that entailed a developer of real estate, a trader of grain, and a dealer of tobacco, enticed by subsidies of gas and assisted by funds access. The bidder’s profile reflected the fever pitch out off shale, as well as its potential along with the government’s efforts to imitate the circumstances that underpinned the US revolution of shale; competition among a number of autonomous drillers.

Significantly, they will have acquired insignificant data regarding the blocks, the costs of the well’s exploration and the costs of the development process. Mainly the firms are merely driven by the forces of entering early in somewhat a huge market. It is significant emphasizing that, the potential in china is clear. Significantly the government has put technically remunerable shale gas reserves at about 25 tcm. In comparison, the US Agency on energy information puts it at about 36.1 tcm, both of which are langer compared to US reserves which are estimated at around 24.4 tcm. However, the shale deposits in china are significantly found deeper underground compared to the ones in the US and there are more scattered reserves; hence, making it complex to acclimatize the technology that has delivered in the US to the geology of china.

Notably, the key oil firms like PetroChina, as well as Sinopec working on what are regarded among the excellent prospects have made slow progress. Considerably, Zhang (2011) identifies that by the year 2012 they had drilled over 60 wells of shale especially around the Sichuan basin, although PetroChina had produced merely over 11 mcm in its key area by the month of November same year. Notably, the work for the winning companies in the second auctions is made significantly difficult by the problem of insufficient potential in the offered acreage (Zhang 4).

Background Companies such as RSDSA and Petroleum corp. of china have started drilling shale gas in Sicuan. Notably, the above- mentioned province is seismically active, a process which increases the risk of causing quakes.