Increased subsidies for coalbed methane mining

Abstract After years of slow development, China's coalbed methane industry is expected to achieve new breakthroughs. On September 22, the General Office of the State Council issued the "Opinions on Further Accelerating the Extraction and Utilization of Coalbed Methane (Coal Mine Gas)" (hereinafter referred to as "Opinions"), clarifying that subsidies for CBM mining will be further improved...
After years of slow development, China's coalbed methane industry is expected to achieve new breakthroughs.

On September 22, the General Office of the State Council issued the "Opinions on Further Accelerating the Extraction and Utilization of Coalbed Methane (Coal Mine Gas)" (hereinafter referred to as "Opinions"), clarifying that the subsidy standards for CBM mining will be further improved, implementing market-oriented pricing mechanisms, and supporting CBM power generation online, and timely increase the on-grid price.

The industry believes that this year, a number of CBM industry policies have been introduced frequently, and coalbed methane industrialization is expected to accelerate. Among them, upstream of CBM exploration, exploration equipment and exploration technology leading oil service companies will take the lead.

Following the release of the "CBM Industry Policy" by the National Energy Administration in March this year, the State Council has also assisted in the development and utilization of coalbed methane from various aspects such as increasing financial support and strengthening tax policy support, hoping to change the development trend of CBM silence. . The "Opinions" pointed out that it is necessary to comprehensively consider factors such as extraction and utilization costs and market sales prices, and improve the central government subsidy standards for the development and utilization of coalbed methane. The specific standards are formulated and formulated by the Ministry of Finance in conjunction with the Development and Reform Commission and the Energy Bureau.

At present, Chinese enterprises develop and utilize coalbed methane, and the central government subsidizes 0.2 yuan per cubic meter. Since 2007, the cumulative subsidy has reached 720 million yuan. At the same time, the local subsidies for the development and utilization of coalbed methane per cubic meter are 0.1 yuan. Huang Shengchu, dean of the Information Technology Research Institute of the State Administration of Work Safety, previously revealed that the subsidy for coalbed methane extraction has increased from 0.2 yuan per cubic meter to 0.6 yuan per cubic meter. The program has been reported to the relevant departments.

In addition, the low price of natural gas is another major constraint to the lack of motivation for CBM production. The "Opinions" clarify that the future natural gas will be market-priced, which will greatly enhance the enthusiasm of CBM development. At the same time, it is necessary to support coal-bed methane power generation online. Coal mine enterprises use CBM power generation to give priority to self-use, and surplus electricity needs to be connected to the Internet. All of them are acquired by power grid enterprises; further simplify the procedures for coal-bed methane power generation grid-connected projects and speed up the review and handling.

According to GF Securities, according to the target of 16 billion cubic meters of ground coalbed methane production in 2015, the number of stock wells in production status needs to be at least 20,000. It is estimated that the investment in surface coalbed methane drilling and mining will exceed 40 billion yuan in the next three years. With the accelerated development of coalbed methane, the oil service company with leading exploration equipment and exploration technology will benefit first in the upstream exploration of coalbed methane.

PL Flanges

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