China National Energy Investment Group and West Virginia of US Signed Framework Agreement
2018-04-28 05:38:16.0

<p>In November 2017, during the visit to China by US President Trump, China National Energy Investment Group will invest USD 83.7 billion in shale gas, power and chemical production projects in West Virginia, USA. The total amount of this investment is more than the total GDP of most Asian-African countries and even West Virginia itself. The previously unknown West Virginia became the focus of global media attention. Why does the National Energy Group of China prepare to invest heavily on this little-known US state?&nbsp;<br/></p><p><br/></p><p style="text-align: center;"><img src="http://www.chinamining.com/image.php/shop/data/upload/media/plantform/6417c4429794e4565b9e0d5ddffdf75f/image/20180426/1524793871499257.jpg" title="" alt="4 (1).jpg"/></p><p style="text-align: center;">West Virginia location map</p><p><br/></p><p>West Virginia is located in the mountains, with small plots and a small population, lacking modern manufacturing industries. In the first half of the 20th century, it has been able to enjoy abundant oil, natural gas and coal resources and a well-to-do life. However, after the 1970s, with the exhaustion of traditional oil and gas resources, what the West Virginia economy was able to draw its hand is only coal mining, and thus the day was worse than a day and it gradually became in trouble.</p><p><br/></p><p>During Obama’s administration, he paid special attention to environmental protection and he was determined to close the West Virginia’s small coal mine. West Virginia&#39;s economy is becoming increasingly embarrassed. Trump campaigned against the Obama administration’s environmental stance and vowed to lead the United States to withdraw from the Paris climate agreement, vigorously develop energy projects, and increase job opportunities for voters. West Virginia people who fell into poverty naturally used Trump as a &quot;savior&quot; and voted without hesitation. In the 2016 presidential election vote, Trump’s support in the state is close to 70%. Trump’s visit to China with a representative of West Virginia also had the meaning of “returning to business”.</p><p><br/></p><p>How will Trump save West Virginia? In fact, there is no other way, or take the old road of energy development. The first is to not shut down coal mines and keep coal miners’ jobs; second is to re-explore natural gas resources so that West Virginia can become an energy base in the eastern United States.</p><p><br/></p><p>Although West Virginia&#39;s oil and gas resources have dried up, the United States has achieved a revolution in key technologies for natural gas extraction. Before 2000, mankind mainly developed conventional natural gas resources and had no way of penetrating shale gas in deep rocks. Since 2000, the United States has developed horizontal drilling and hydraulic fracturing technology to extract large quantities of natural gas in shale beds. As a result, many depleted oil and gas producing areas have become a good development opportunity.</p><p><br/></p><p>According to the U.S. Energy Agency survey data, shale gas reserves in the United States are very abundant, and more than 30 states have shale gas resources, ranking second in the world in total reserves. The four-major shale gas production areas currently being developed are Barnett, Marcellus, Haynesville and Fayetteville. Among them, the development of the Barnett shale area was the earliest and the production growth in the Marcellus shale area was the fastest.&nbsp;</p><p><br/></p><p style="text-align: center;"><img src="http://www.chinamining.com/image.php/shop/data/upload/media/plantform/6417c4429794e4565b9e0d5ddffdf75f/image/20180426/1524793897496520.jpg" title="" alt="4 (2).jpg"/></p><p style="text-align: center;">Marcellus Shale Gas Well</p><p><br/></p><p>The Marcellus shale area is located in the eastern Appalachian Basin. The area of shale is about 248,800 square kilometers and the recoverable resources are 5.3 trillion cubic meters. There are two core production areas in the northeast and southwest. Due to good geographical conditions, relatively low mining costs, and proximity to the economic center, from 2009, the international energy giants have gone to the Marais shale area to expand their strategic energy reserves. Chesapeake Energy, Chevron, Nobel Energy, National Gas, Lange Resources, Shell Petroleum, and Talisman Energy all participated in the industry competition in the region.</p><p><br/></p><p>In administrative divisions, the Marcellus shale area is mainly distributed in Pennsylvania, Ohio, and West Virginia. With the entry of energy giants, shale gas production in these three states has risen sharply, of which Pennsylvania is the most prominent. In 2011, it produced only 1,208.868 billion cubic feet (30.3 billion cubic meters), and in 2016 it rose to 5.0103.49 billion cubic feet. Surpassed Texas to rank first in the United States; Ohio produced 1,388.656 billion cubic feet of shale gas in 2016, ranking third in the United States; West Virginia produced 122.864 billion cubic feet of shale gas in 2016, ranking fourth in the United States.&nbsp;</p><p><br/></p><p>From this we can see that the Marcellus region has become the new energy production base of the United States. Chinese companies invest heavily in the region shows that they are going with the flow.&nbsp;</p><p><br/></p><p style="text-align: center;"><img src="http://www.chinamining.com/image.php/shop/data/upload/media/plantform/6417c4429794e4565b9e0d5ddffdf75f/image/20180426/1524793927501279.jpg" title="" alt="4 (3).jpg"/></p><p><br/></p><p>West Virginia is adjacent to Pennsylvania and is located in the southwestern part of the Marcellus shale area. Within its territory, it has identified shark gas reserves of 192260 billion cubic feet (544.4 billion cubic meters), accounting for about 11% of total shale gas reserves in the United States. Since 2011, the shale gas industry in West Virginia has entered a period of rapid development and production has increased year by year. In 2015, about 90% of its natural gas production came from shale gas. At present, the underground natural gas storage capacity in West Virginia is 530 billion cubic feet, accounting for 6% of the total underground natural gas storage capacity in the United States. Due to limited domestic consumption, natural gas in West Virginia is mainly exported to the outside world and has now become an important supply state for the natural gas market in the northeastern United States. China National Energy Group&#39;s investment in West Virginia shale gas project is probably seeing the huge potential for development of its shale gas industry.&nbsp;<br/></p><p style="text-align: center;"><img src="http://www.chinamining.com/image.php/shop/data/upload/media/plantform/6417c4429794e4565b9e0d5ddffdf75f/image/20180426/1524794107476598.jpg" title="" alt="4 (4).jpg"/></p><p style="text-align: center;">West Virginia Shale Gas Industry Statistics</p><p><br/></p><p>However, why did China National Energy Investment Group, which was restructured through Shenhua and Guodian, not invest in Penn State? The state of Pennsylvania is in good economic condition. Its gross domestic product ranks sixth among all states in the United States. Shale gas reserves are 2.7 times that of West Virginia. Production is more than four times that of West Virginia. Related facilities are more complete and the investment environment is obvious. It&#39;s much better than West Virginia. At the same time, Shenhua Group has several years of development experience in Pennsylvania, and it is more reasonable to manage it.</p><p><br/></p><p>Four years ago, Shenhua Group took notice of the enormous potential of the Marcellus shale area and announced an investment of US$90 million in cooperation with the United States Energy Corporation (ECA) to develop the Shale Gas Project in Green County, Pennsylvania. In March 2014, the project was put into operation one after another. In July 2016, 29 shaft drilling operations were completed, and 17 operations entered the production stage. Accumulated production of shale gas was 1.083 billion cubic meters.</p><p><br/></p><p>As far as West Virginia is concerned, there are very limited contacts with China. According to public information, West Virginia and Shanxi Province are both resource-based economies and have formed a friendly province relationship; West Virginia University and Shenhua Group have jointly established the China-US Clean Energy Research Center and have business contacts. However, prior to Trump’s visit to China, there has not been a record of Chinese companies investing heavily in West Virginia natural gas projects. In addition, West Virginia’s import and export trade with China is also at the bottom of the U.S. states.</p><p><br/></p><p>Although it seems more reasonable for China National Energy Investment Group to invest in Pennsylvania or Ohio gas industry. However, before signing an agreement with West Virginia, China National Energy Investment Group must have conducted extensive investigations and detailed arguments. It believes that the potential of West Virginia&#39;s natural gas industry has not yet been fully explored, and there is more room for growth in the future than in Pennsylvania.</p><p><br/></p><p><br/></p>

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