China's shale gas industry began with a long shot.
Guo Xusheng, a stout and affable chief geologist at a unit of China Petroleum & Chemical Corp., persuaded his bosses in 2009 to give him about $3 million to drill deeper than anyone had before in southwestern China. For Sinopec, as the company is known, the shale boom in the U.S. convinced them that Guo's plan was worth a try.
Success was far from certain. China National Petroleum Corp., the nation's dominant oil company, already drilled the same area and came up dry.
Then, in 2012, Guo's team struck pay dirt, hitting a huge pocket that spewed 200,000 cubic meters of gas a day, enough to heat tens of thousands of homes. So surprised were Guo and his team that they flew 1,800 kilometers (1,100 miles) to Beijing to confer with corporate chieftains on what to do next. Their discovery in the rugged mountains of the Sichuan Basin burned off for 40 days until it was decided to risk the possible collapse of the reservoir by capping it.
Six years and billions of dollars later, China's quest to unlock shale resources on a scale as big as the U.S. is still looking like a long shot.
“U.S. shale reserves are like a plate, in relatively good shape and buried evenly close to the surface,” Guo said. “For China's shale reserves, it's more like a plate that was smashed on the ground, and then stomped on. We're trying to identify those scattered reserves and trying our best to get to the bigger ones.”
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