Approach and potential of replacing oil and natural gas with coal in China

Abstract

China’s fossil energy is characterized by an abundance of coal and a relative lack of oil and natural gas. Developing a strategy in which coal can replace oil and natural gas is, therefore, a necessary and practical approach to easing the excessive external dependence on oil and natural gas. Based on the perspective of energy security, this paper proposes a technical framework for defining the substitution of oil and natural gas with coal in China. In this framework, three substitution classifications and 11 industrialized technical routes are reviewed. Then, three scenarios (namely, the cautious scenario, baseline scenario, and positive scenario) are developed to estimate the potential of this strategy for 2020 and 2030. The results indicate that oil and natural gas replaced by coal will reach 67 to 81 Mt and 8.7 to 14.3 Gm³ in 2020 and reach 93 to 138 Mt and 32.3 to 47.3 Gm³ in 2030, respectively. By implementing this strategy, China’s external dependence on oil, natural gas, and primary energy is expected to be curbed at approximately 70%, 40%, and 20% by 2030, respectively. This paper also demonstrates how coal, as a substitute for oil and natural gas, can contribute to carbon and pollution reduction and economic cost savings. It suggests a new direction for the development of the global coal industry and provides a crucial reference for energy transformation in China and other countries with similar energy situations.

Keywords

coal replacing oil and natural gas / energy security / external dependence / energy strategy / China

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Acknowledgments

This work was supported by the Major Project of the Chinese Academy of Engineering, Optimization Study on China’s Energy Structure with Carbon Constraint (Grant No: 2016-ZD-07) and the Project of the China Knowledge Centre for Engineering Sciences and Technology in Chinese Academy of Engineering, Professional Knowledge Service System for Energy (Grant No. CKCEST-2019-2-6).

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