Shale Gas Challenges in China
Though China may hold the world’s largest share of “technically recoverable shale gas resources,” extracting the gas is likely to be troublesome and expensive. Challenges involving resource accessibility, water availability, and corporate culture are already leading to doubts about China’s ambitious production aims, and “few analysts think Beijing will be able to meet the [production] goals set out in its five-year plan for 2011–2015.”
To make large-scale production feasible, China will first need to develop technology to overcome its expense barriers, according to RFF’s Alan Krupnick and Zhongmin Wang, who lead RFF’s new Consortium for Energy Economics and Policy in China. They note that the price of shale gas extraction in China is “widely reported to be several times higher than that in the United States,” suggesting that solutions should be coupled with efforts to “generate a policy and market environment in which firms have the incentive to make investments and would eventually find it profitable to produce shale gas.”
Expectations for Electric Cars
Toyota chairman and Prius pioneer Takeshi Uchiyamada recently noted that “the day when an affordable vehicle that could supplant, in a widespread way, the existing internal combustion fleet may be a long way off.” In a recent speech in DC, he discussed financial concerns and technology obstacles for electric vehicles, such as a need for batteries that can travel longer distances with shorter charging times, and acknowledged that such obstacles will not disappear any time soon.
In the final installments of an electric vehicle blog series on Common Resources, RFF’s Joshua Linn and Virginia McConnell agree that “greater cost reductions will be needed for [electric vehicles] to dominate the vehicle market without subsidies.” They find that consumer subsidies do make the vehicles more competitively priced, and other manufacturer subsidies create strong incentives for technology improvements. However, whether good economic arguments exist for either is up for debate.
