Major drillers increasing low-carbon utilization of fossil fuels to reduce CO2
China's national oil companies are accelerating their transition toward cleaner energy practices, focusing on the efficient utilization of fossil fuels and the integration of oil, gas and renewable energy resources, said company executives and industry experts.
This strategic shift aligns with China's dual objectives of ensuring energy security and achieving carbon neutrality before 2060, they added.
During the two sessions — the annual gatherings of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference — several NPC deputies proposed accelerating the low-carbon utilization of fossil fuels through coordinated policy support and technological advancements.
Dai Houliang, an NPC deputy who is also chairman of China National Petroleum Corp, called for policies supporting the large-scale development of unconventional resources such as shale gas and coalbed methane (CBM).
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CBM is a new type of unconventional natural resource that is widely distributed across coal-rich basins in China, such as Ordos, Sichuan and Junggar, with estimated reserves exceeding 40 trillion cubic meters.
By increasing the proportion of natural gas in its energy consumption mix, China could reduce its reliance on more carbon-intensive fuels, thereby lowering overall carbon emissions, Dai said.
He also suggested scaling up the integration of oil and gas operations with new energy resources — such as solar and wind power — including initiatives supporting the direct supply of green electricity and promoting local consumption of renewable energy.
Research and development in new energy storage technologies are also advisable to enhance the flexibility of the power system, thus facilitating the transition toward accommodating a high proportion of renewable energy, he added.
The company announced the commissioning of its largest-ever solar project in Tarim oilfield in the Xinjiang Uygur autonomous region earlier this month, which will see its generated green power transmitted via the national grid to load centers in the eastern parts of the country, further ensuring sufficient green power supply.
The project, expected to generate 2.1 billion kilowatt-hours of clean electricity annually, will also ensure that CNPC's 1.2 million metric-ton-per-year ethylene project at the local petrochemical plant operates entirely on green electricity, alleviating local power shortages during peak demand and improving the regional energy mix, it said.
Industry experts believe that while China is accelerating the construction of large-scale wind and photovoltaic power bases, particularly in arid regions, oil and gas are expected to maintain their share of the energy mix over the medium to long term, making it critical to avoid disruptions caused by the energy transition.
This, in turn, makes efficient utilization of fossil fuels and the integration of oil, gas and renewable energy resources even more necessary, they said.
Wu Mouyuan, vice-president of the Economics and Technology Research Institute under China National Petroleum Corp, said, "Fossil fuels are expected to serve as a safety net and a source of key materials during China's energy transition, with non-fossil fuels becoming the backbone of energy supply."
While China's leadership in renewable energy has set the stage for a multifaceted energy structure by 2060, oil will remain indispensable for decades to come, Wu said.
Currently, oil and gas account for 18 percent and 9 percent, respectively, of the energy mix. By mid-century, renewables are expected to dominate, accounting for nearly 80 percent of the energy portfolio, according to figures released by the institute.
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He added that China has been tapping into unconventional resources to expand its energy supply, with significant advancements in shale gas exploration and CBM extraction currently reshaping the country's resource landscape.
Untapped reserves, such as low-maturity shale oil and underground coal gasification, could unleash vast new potential in the coming decades, he said.
Dai also recommended elevating the refining and chemical sectors, with policies introduced to encourage enterprises to develop sustainable aviation fuels, biodiesel and biobased chemicals.
"The refining and chemical industries are undergoing a transformation toward high-end, green and low-carbon development, and we should continue expanding the domestic production of high-end synthetic materials and specialty chemicals to increase the proportion of low-carbon and zero-carbon petrochemical products," he said.
