Prospect of China's synthetic natural gas from coal gasification technology under consideration of economic, environmental, and security factors

Synthetic natural gas (SNG) from coal gasification technology has become an alternative method to alleviate China's natural gas shortage. However, the Chinese SNG industry still faces a series of problems, such as low profits, high carbon emissions, and water shortages, and Chinese SNG policy is cautious and unstable. Considering economic, energy security, and environmental constraints, this study analyses the future of SNG in China by using a system dynamics model. The results are as follows. In under various circumstances, SNG production is projected to reach 20.8-44.2 bcm by 2030. SNG production could reduce the dependence on gas imports to 23-40% in 2030, which may help to reduce the risk of natural gas imports. The energy production efficiency index, EROI (Energy Return on Investment), of SNG is only approximately 1.5, and thus, economic profitability will remain very low for a long time; in general, price subsidies will be conducive to increasing SNG production. Based on these results, the study provides some suggestions for policy-makers.