11:54 11.12.2017

How China’s Anti-Smog Push Left Citizens Freezing

Source: Bloomberg
How China’s Anti-Smog Push Left Citizens Freezing

China President Xi Jinping pledged to unleash an “iron hand” to protect the environment and deal with chronic pollution. Among the main strategies is reducing the reliance on smog-spewing coal and switching industrial factories to cleaner natural gas. But there’s a problem: Increased gas burning has resulted in shortages in some of the chilly northern provinces as winter approaches, leaving citizens freezing and businesses hamstrung. It’s gotten so serious some regions are being ordered to fire up those coal-burning plants again.

1. How bad are the shortages?

Chinese have taken to social media to vent their frustrations, with some claiming their coal-fired heaters were dismantled and elderly people and children were suffering from the cold. State media chimed in too: A China Daily editorial said local officials were being too hasty in implementing the gas-for-coal drive. Other examples from local reports: Hebei province, home to more people than the U.K., signaled gas shortages of 10 to 20 percent and called on businesses to curtail use; distributors limited supplies in Shaanxi and Shandong provinces; and cooks in Wuhan have been asked to avoid simmering soups before lunch and dinner.

2. What is the government doing about it?

Officials in China’s frigid northern provinces have been ordered to prioritize keeping citizens warm, and areas that hadn’t yet converted fully to gas were permitted to burn coal for heating, according to a statement by the Ministry of Environmental Protection. Its circular went to 28 cities -- including Beijing -- and was marked urgent, China Daily reported. The country’s top economic-planning body has set up a monitoring system with local governments and gas suppliers to combat shortages. Beijing, which reportedly stopped using coal for heating and power in March, has asked a plant to restart its coal-fired units, Caixin magazine said.

3. What went wrong?

At the end of 2016, the government laid out the goal of natural gas providing up to 10 percent of its energy by the end of the decade. At the time, that target seemed ambitious and there were no clear policies that would force the change -- which analysts said would require double-digit growth annually. But the drive to switch industrial and residential users this year exceeded expectations, with demand up 19 percent over the first 10 months and suppliers running out just weeks into the winter heating season. It takes far more time to install the infrastructure required for natural gas power generation than it does to dismantle coal-fired heating sources. Those 28 cities, which are long-time users of coal for heating, were told in August to cut air pollution, China Daily said.

4. Why is China targeting coal?

It’s about as dirty a fuel as it gets. And China is grappling with some of the worst pollution on the planet. One report has said people in northern China may be dying five years sooner because of air pollution. Other research links pollution and lung cancer. Chinese authorities have tightened environmental laws, raised fuel taxes, limited the number of cars and unveiled more investments in solar and wind power. Tackling coal use is also key to its push to reduce smog, which can be particularly bad in the north and northeast, home to the rust belt as well as cities like Beijing and Tianjin.

5. Will the situation get worse as winter arrives?

A lot depends on the weather, as a severely cold winter would increase heating demand and exacerbate shortages. Regions which aren’t experiencing shortages now may face them as companies divert supplies to the north. China has relatively little storage space for natural gas, so it can’t squirrel away supplies when demand is low in the summer to have on hand for the winter. Goldman Sachs Group Inc. analysts expect tight winter markets the next two-to-three years as coal-to-gas conversions continue to drive strong demand.

6. How big a setback is this for anti-pollution efforts?

Xi has made the transition to cleaner power a priority, but implementation hasn’t been smooth. The drive to limit coal output also met problems last year by sending gas prices soaring and squeezing power companies. And China remains the world’s biggest consumer and producer of coal, with imports of the fuel rising in November. According to Greenpeace, progress tackling air pollution has begun to slow after almost two years of continuous improvement. One-third of China’s cities opened 2017 by issuing smog-related health alerts, as off-the-scale pollution readings were recorded in industrial provinces such as Hebei.

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