Coal Bed Methane : Coal Bed Methane in China

CBM has become an important energy source in, among other places, the U.S., where output hit 62.4 billion cubic meters last year. Capturing this greenhouse gas not only helps contain global warming but also can improve safety conditions in mines. CBM can be injected into natural-gas pipelines for resale, used as an industrial feedstock or used for heating and electricity generation.

China already has proven Coal Bed Methane reserves of 47.8 trillion cubic meters, similar to its natural-gas reserves of 49.4 trillion cubic meters, according to the National Development and Reform Commission. The nation has the third-largest Coal Bed Methane reserves in the world behind Russia and Canada.

China has a strategy to use multiple sources of energy, while also developing alternative sources. The strategy aims to increase the proportion of renewable sources of energy in the entire energy structure to around 15 per cent by 2020 from the current 7 percent.

China has set ambitious targets to use more Coal Bed Methane, or CBM, to help ease a growing domestic energy shortfall. The National Development and Reform Commission, China's top economic-planning agency, wants to capitalize on the country's huge coal reserves and boost output of this so-called clean fuel to 13 billion cubic yards in 2010.

Given China's huge reserves and its efforts to promote clean-fuel use and trim dependence on imported energy, CBM would seem to have a very good future.

Many foreign investors are entering the Chinese Coal Bed Methane sector as the Chinese government has set out a series of preferential policies for overseas investment to enter the methane exploitation sector, including tax rebates.