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International Journal of Energy Policy and Management

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Causes and Countermeasures of Seasonal Shortages of Natural Gas in China

International Journal of Energy Policy and Management
Vol.4 , No. 1, Publication Date: Apr. 9, 2019, Page: 1-7

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Authors

[1]	Xuan Zhou, School of Business Administration, China University of Petroleum (Beijing), Beijing, China; China Petroleum Technology and Development Corporation, Beijing, China.
[2]	Xiucheng Dong, School of International Trade and Economics, University of International Business and Economics, Beijing, China.

Abstract

Along with rapid growth of China's natural gas consumption, frequently happened seasonal shortages affected sustainable development of natural gas industry and also brought serious negative impact on economy and society. This paper analyzed characteristics and immediate causes of seasonal shortages occurred in the winter of 2017, and further explored deep-rooted reasons behind this, including unbalance of natural gas supply and demand, maladjustment to repositioning of natural gas in China's energy structure, distortion caused by cross subsidies and excessive market concentration, etc.. Seasonal shortages reflected the mismatch between formerly centralized management mechanism and current natural gas industry development, so the author regarded market-oriented reform as the core solution to solve seasonal shortages in China, around which following suggestions were proposed: (1) Adjusting the position and development targets of natural gas industry, and fully exploring natural gas’s unique value as a clean energy; (2) Developing and optimizing natural gas trading markets through building natural gas trading hubs, adopting basis price to increase standardization level of transactions, and fostering new competitors by removal of barriers to entry; (3) Increasing and diversifying natural gas supply to meet growing demand; (4) Promoting construction and interconnection of natural gas infrastructures.

Keywords

China, Natural Gas, Seasonal Shortage, Clean Energy, Cross-Subsidy, Market Concentration, Market-Oriented Reform, Peak-Shaving

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