Recent comments by An Qiyuan, chairman of the Chinese People’s Political Consultative Committee for Shaanxi, warned of the environment and social catastrophe facing the northwestern province of China because of a shortage of water.
He was referring to the diversion of water from Shaanxi to Beijing ahead of the Olympics and hydroelectricity plants which he believes should be closed down.
Water is a particularly scare resource in western China – where most of the country’s coal gasification projects are located. The technology is arguably a wasteful, heavy consumer of water.
And this raises an interesting dilemma for Dow Chemical – potentially a joint investor with Shenhua Energy in a coal-to-chemicals project in Shaanxi.How do you balance economics with the environment?
Coal gasification could represent the promised land – provided you can solve the logistics problems and provided the long-running doubts over the viability of methanol-to-olefins technologies are unfounded.