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China's northern cities face soot-free winter with gas revolution

[October 03, 2017] By Meng Meng and Josephine Mason

XIAOZHANGWAN, China (Reuters) - As freezing winds whip across northern China this winter, Yao Guanghui is happy he'll have one less chore to do: feeding the coal furnace that has long heated his small house on the outskirts of Beijing.

Traipsing outside on freezing nights to haul coal for the two big burners in his kitchen was his least favorite household job.

But next month, the 60-year-old will turn on the heating with a flick of a switch on the gas-powered boiler that sits in a sooty alcove that once housed his coal furnaces.

"My face and nostrils would be covered with coal dust by the time I got into the kitchen," he said on Thursday, recalling his efforts to carry coal into his two-room house during the long winter. "We hope this winter will be much cleaner and warmer."

Yao and his family are among millions of people across northern China preparing for their first winter to be heated by gas - part of a government effort to wean the nation off dirty coal and improve the nation's notoriously bad air.

The massive effort involves almost 4 million homes in 28 cities. The government is plowing tens of billions of yuan into the project to install equipment, build thousands of kilometers of pipes and subsidize the higher costs of gas.

(Graphic for China planning to connect more than 4 million homes in 28 cities with gas this winter, click http://reut.rs/2yRDVdt)

Beijing has been under increasing pressure to deal with chronic air pollution amid concerns about the damage it is causing to people's health. Smog gets worse during the colder months when homes in the north of the country crank up heat that is overwhelmingly fired by coal.

The air quality index for the area around the village on Thursday morning was just 4, a low level anywhere in the world. But when smog shrouds the capital during the winter, the index often rockets into the hundreds to hazardous levels.

Air pollution caused by coal-fired winter heating has slashed life expectancy in the north by more than three years compared with the south, according to a recent study by the University of Chicago (EPIC).

Among other measures, China has pledged to impose tough industrial and traffic curbs this winter and is also in the process of shutting thousands of coal-fired industrial boilers.

(Graphic for China's changing energy mix targets more gas, less coal, click http://reut.rs/2yR8rUS)

For the global gas market, the potential impact of gasifying the world's second-largest economy is enormous, with Russia and the United States poised to benefit from China's growing need for foreign supplies.

Wood Mackenzie reckons the effort will add 10 billion cubic meters of gas demand this winter. That's about 5 percent of China's consumption last year or the equivalent of Vietnam's total annual use. The project will also need heavy investment in infrastructure such as pipelines and storage tanks.

STAGGERING

The pace and scale of the project over the past six months has been staggering, even for a place like China, where high-rise tower blocks and shopping malls go up with blistering speed.

A Reuters analysis of data released by the Ministry of Environmental Protection shows that two-thirds of the cities under the program have surpassed the target set by the government to switch at least 50,000 homes to clean fuel by November.

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A villager cycles past the gas pipeline construction instead of coal-powered boilers in Xiaozhangwan village of Tongzhou district, on the outskirts of Beijing, China June 28, 2017. Picture taken June 28, 2017. REUTERS/Jason Lee

That target would have meant 1.4 million homes, but two cities, Baoding and Langfang in Hebei, account for most of that together.

Beijing Gas, which is overseeing the plan in the capital, must lay over 3,000 kilometers of pipelines and build 400 gas stations. It has connected 300,000 residents so far.

(Graphic for China's plan to use more gas will require a substantial increase in gas-handling infrastructure, click http://reut.rs/2yjjhGg)

"Some of these projects are more complicated than we expected," said an official from Beijing Gas who declined to be named as he is not authorized to speak to the media. He said the project involved building pipelines that went under the Great Wall and crossed environmentally sensitive areas.

PILES OF BOILERS

On a recent visit to Yao's village of Xiaozhangwan, a few kilometers from the outskirts of Beijing, old boilers were stacked along dusty narrow alleyways ready for scrapping.

Government engineers were rushing to install new radiators in 300 homes before the onset of winter.

In many houses, the radiators will replace systems that have been used for centuries in rural villages in northern China - burning coal to heat large beds where whole families gather during the winter.

Workmen were digging up the main street to lay the feeder pipeline that is connected to one of three pipelines that run for thousands of kilometers from Shaanxi province to China's northeast.

(Graphic for China's energy mix since 2000, click http://reut.rs/2yRZUkF)

Some villagers are skeptical that gas will be as powerful and resilient as coal and have insulated the walls of their homes and sealed windows to make them more efficient.

As they embark into the unknown, many residents also worry about higher bills. Gas costs almost double that of coal.

The government will supply about 2,000 cubic meters of gas worth almost 5,000 yuan ($748.95) at a discount to current residential gas prices, but Yao is unsure if that would see him through a particularly cold winter.

"I don't know if that would be enough for heating and cooking for the family," said Yao. "We will need to pay extra cost if we use more than that."

(Reporting by Meng Meng and Josephine Mason; Editing by Philip McClellan)

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